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Having trouble understanding your credit card agreement? Don't worry, so do four in five Americans.


Without insult, you should accept the fact that you read at a ninth grade level. It’s okay, four out of five adults do. It doesn’t mean you like the "Twillight” series, it means that the depth of your vocabulary and comprehension skills are at the most efficient level needed to succeed in today’s society. In short, it’s fine. And that’s not really the point of this post anyway.

It should come to no surprise then, that credit card companies create their agreements, notices and paperwork at a reading level on par with the comprehension and reading skills of only one in five Americans. Why do you think they do that? Never mind, you know why.

Roy Peter Clark, a recognized writing skill level specialist and a senior scholar at the Poynter Institute, explains succinctly why the credit card industry does this. “So that the customer will not be able to understand it ... I may be cynical, but I don't think their writing strategies are accidental, the collateral damage of a bureaucratic mindset. I think those writers know exactly what they are doing."

What else is not accidental is the industry’s overall marketing strategy, which appeals to status and our most base level of wanting, an emotion with which infants can identify. Thus, you have the ultimate bait and switch. They market to us on a broad, simple-to-grasp level but apply rules to their product that are deliberately arcane. To think this contradiction doesn’t contribute to the country’s incredible debt situation would be foolish. But that’s what they want us to believe.

The industry collectively spends billions to learn how the human psyche works so they can get inside it to sell us things and then skirts culpability when, lo and behold, it actually works!

New credit card laws are supposed to make the entire process of overseeing your credit cards a bit easier. The big rules may be in place about interest rate notifications and cancellation options and the like but no hard and fast regulations are in play about making agreements easier to understand. Some companies are trying to make an effort with separate forms that explain clearly the terms of an agreement. However, that sheet is typically coupled with a more traditional version that contains all the fine print and confusion.

In fact, little has changed with the new laws in this regard and in some cases, the sense of simplicity that many assume is now inherent because of the new laws can lead to false sense of confidence that the credit card companies are now on the straight and narrow. Hardly.

One may think that Visa and Mastercard don’t want you to read the fine print. The truth is, that is exactly what they want you to do. The language, terms and figures serve are great distractors. They are textual sleights of hand, taking our eyes away from what really matters, leaving us dumbfounded when the monthly balance sheet arrives. “Did I agree to this?”

Creditcards.com performed an analysis of more than 1,200 credit card agreements that are now required to be made public as part of the new legislation. What they found was an array of vexing terminology and financial language that actually read almost four levels higher than the average citizen.

Among many other astounding characteristics, they found that the Visa and Mastercard agreements for Fifth Third Bancorp contained 20,799 words and is written at a 14.5 reading level. The United States Constitution has just over 4,000 words.

Our Founding Fathers would be so proud.

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