The Fed's New Credit Card Site For Consumers Makes Things More Confusing, Not Less
This is so cute. The Fed put together a shiny new website (design whore JDA gives the Fed props for at least making a slick interface) meant to help consumers make sense of complicated credit card terms and conditions but consumers end up just as confused as before.
Way to, uh, look out for dumb ass America and our inability to read two pages of microtext stuffed in with a credit card agreement.
The Federal Reserve on Monday introduced an online database listing the terms and conditions of more than 300 credit card issuers to help consumers find a card that best suits their personal finance needs.
Under legislation passed last year, credit card issuers had to put their card agreement online.
But the database, mandated under the far-reaching credit card legislation signed by President Obama last May, contains only the raw text of card agreements, which are so densely worded that only the most dedicated customer, perhaps one with a legal degree, could glean value from them, several consumer advocates said.
Take, for example, this section from a PNC Bank card agreement: “We will calculate finance charges on cash advances by multiplying the ‘average daily balance of cash advances’ by the total number of days in the billing cycle, and multiplying the product by the daily periodic rate of finance charge then in effect.
“The daily periodic rate of finance charge for each billing cycle shall be a rate computed by adding a margin (‘Margin For Cash Advances’) to the value of the index and dividing by 365. The corresponding annual percentage rate will be the index plus the Margin For Cash Advances.”
Um no, no I don't.
Then again, what sort of dent in that income returned to Treasury would be made if the Fed hired a couple monkeys to comb through this information and actually translate it?
And you guys think I'm exaggerating when I say we're stupid?
Credit cards used to have a fixed interest rate of about 20 percent and a small number of fees. In the 1990s, however, credit card issuers began issuing cards with a greater variety of interest rates and fees, according to a 2006 report by the Government Accountability Office.
“Although half of adults in the United States read at or below the eighth-grade level, most of the credit card materials were written at a 10th- to 12th-grade level,” the report found. “In addition, the required disclosures were often poorly organized, burying important information in text or scattering information about a single topic in numerous places.”
Good thing the Fed has been tasked with babysitting since we obviously can't keep track of our money.