Credit Card Contracts: Most of Us Don't Read Them, Half Don't Understand Them

There hasn’t been much progress among U.S. consumers in fully comprehending those bulky and wordy credit card agreements. Most don’t even read them and half of consumers don’t fully comprehend them.

An analysis of more than 2,000 current card agreements shows they’re written, on average, at the 11th grade reading level, says That’s an improvement over a similar review done five years ago. But it’s still a challenged for at least half the population to understand the credit card contracts.
When consumers were asked to describe their card agreement in one word, the most frequent answers were “wordy,” “confusing” or “complex,” according to “Tedious” and “painful” were also used. Just 26 percent of cardholders said they regularly read their credit card agreements.
Five years ago, the U.S. Consumer Financial Protection Bureau launched a campaign to simplify credit card contracts. The CFPB urged card issuers to cut the length and complexity of the contracts. analyzed the readability of every 2016 credit card agreement on file wit the CFPB, and compared them to those filed in 2011. Among the findings:

  • The average agreement requires an 11th grade reading level, slightly better than the 12th grade required to understand card agreements in 2011. However, that’s still well above the average consumer’s reading level, since half of the American adult population reads at a ninth grade level or below.
  • The average credit card agreement is 4,900 words, down about 500 from 2011. While that’s a 10 percent improvement, that much text, four times longer than the federal government’s model agreement, would take the average adult 20 minutes to read.
  • Key Bank’s Key2More Rewards card has the lengthiest agreement in the database. At 15,037 words, it is slightly longer than Shakespeare’s play “The Comedy of Errors.” Printed out, single-spaced, with one-inch margins, the Key2More agreement consumes 30 pages of paper.

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