Credit card offers still difficult to compare due to fine print

Although with the recent reforms in the credit card industry have made things slightly easier by allowing credit card holders to understand the penalty charges levied on them and the interest rates slightly better, the condition is still worse compared to where things were 10 years ago. The credit card offers are complicated enough to throw challenges when it comes to card shopping. This complexity is not because of the overwhelming amount of information that banks are required to disclose to the consumers. Rather it is because the terms, the fee and the fee and interest rates structures have become far more complex. This is one reason that has led to the recent card offers to have segregated listings for the minimum interest rates, cash advance interest rates, fees for balance transfer and penalty rates, each of which has been added over the decade or so as part of disclosures.

Although the fee was available on some cards earlier, more and more cards are adopting these charges which are now getting added to the disclosures increasing the complexity. Over the last one decade or so, it was found that on an average a mailed credit card offer from any of the top 20 credit card issuers consisted of 13 different numbers a decade ago and has peaked to exceed 30 in recent times. This average however, has come down once the reforms and regulations have kicked in. But even with this reduction it is far more information than an individual can comfortably process, especially when it comes to comparing two credit cards to pick the one that suits the customer more.

What adds to the complexity is the reward programs too, which are not added on the disclosure boxes and ends up confusing the customers even more. Although there are a few credit unions which have ensured that their card terms are simple, others can quickly take consumers to information overload especially when it comes to checking the points in the fine print. Another school of thought is that in the absence of all these products to make way for plain vanilla credit cards, consumers might not benefit from choice or innovation. Another observation made was that the language on the disclosure is more for the legal protection of the credit card customer rather than for the understanding of the customers. The disclosures aren’t really explanatory and are termed with legalities in mind.