16 October 2006
GAO complains about plastic
The Government Accountability Office, after a fifteen-month study, has concluded that credit-card disclosure statements don't actually disclose very well:
Disclosure material explaining fees that is provided by the largest issuers of credit cards has "various weaknesses that reduced consumers' ability to use and understand" it, the report said. It found that the disclosures are written in language that is hard to understand, bury important information in text, fail to put related material together and use small typefaces.
Some fees, such as a $5-to-$15 charge to pay a credit-card bill by phone, are often not disclosed, according to the report.
It recommended that the Federal Reserve should revise rules on credit-card disclosures to require that they more clearly emphasize penalty fees and rates and what triggers them.
Especially since they're going up all the time: 20 percent of cards issued by the Big Six issuers are now at interest rates of 20 percent or more, with the majority of those cards over 30 percent, and 35 percent of accounts incurred at least one late fee last year.
The firms covered by the report are Citibank, Chase, Bank of America/MBNA (now merged), Capital One and Discover.Posted at 9:23 AM to Common Cents
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