Oct 1 - Federal regulators first required credit card disclosures in 1968 as a way to help consumers make better-informed decisions about using their cards. But several indicators suggest that disclosures have not been fulfilling their intended purpose. Revolving debt is up, credit card products have become more complicated as issuers compete by varying the terms and conditions of their cards, and consumers voice increasing frustration about unexpected penalties and fees. Consumer complaints led to increased legal and regulatory attention, and changes now are pending to require, among other things, more readable disclosures. Card issuers, however, have already begun improving the information they provide to consumers. This paper describes some of the strategies used by three major banks to supplement current disclosure practices. Although conclusive evidence about the effectiveness of these strategies isn’t yet available, our research suggests that greater clarity may help build trust among consumers.
Click here to access the paper.