Why Johnny Can’t Read His Credit Card Agreement

From CreditCards.com comes the news that U.S. credit card agreements are unreadable to 4 out of 5 adults. It is not that they are written in invisible ink, or tiny print, or even that they are hidden away in the deep recesses of someCredit-cards Lotus Head web site. The agreements are printed in easy to see black and white and mailed to the card holder’s house.

Are they in Latin? Do they involve obscure legal terms? Perhaps they are poorly translated from some foreign tongue?

No, they are unreadable to 4 in 5 Americans because those sneaky credit card companies have written them in standard English, but at a 12th grade level. Bastards.

Do not let the fact that 80% of Americans have successfully completed the 12th grade confuse you. The average American adult reads at a 9th grade level.

At least we are in high school. More than half of us, anyway.

From CreditCards.com:

"Credit card contracts and other such documents are written in dense prose for a reason: So that the customer will NOT be able to understand it," notes Roy Peter Clark, a national expert on writing and a senior scholar at the Poynter Institute in St. Petersburg, Fla. "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."

Much as I hate to admit it, Mr. Clark is more cynical than I am. (And can there be any clearer indication of widespread illiteracy than that a man who uses “NOT” in a sentence is considered a national expert on writing? Alas, I digress.)

12th grade is the average reading level of all agreements, not weighted by the size of the issuer. Most of the really big boys had appropriately dumbed-down ones. Wells Fargo, Citibank, B of A, and Amex all came in at 9th grade or below. Capital One managed to suck down to a 7.3 grade level. (New slogan: What is in your wallet besides cash and ID?)

In contrast, the top 10 agreements with the highest grade levels measured is a list of tiny and obscure issuers you have never heard of. Top honors went to GTE Federal Credit Union at an 18.5 grade level. Apparently, you need to be halfway through your last year of law school to understand it.

I hypothesize (that means guess) that the larger banks have more money to spend and hire professional writers to make their agreements easier to read. The smaller outfits mostly don’t, meaning what you see was crafted by a lawyer who had other concerns on his mind.

Of course, the much bigger problem here is that Americans can’t read. As disheartening as it is to learn that the average American reads only at a 9th grade level, it is truly alarming when you learn what is meant by 9th grade. CreditCards.com provides a graphic with an assortment of works and where they score on the same scale as used for the card agreements.

Twilight, that favorite of sixth grade girls, comes in at 8.2. The King James Bible gets an 11.1. But it’s not the real 17th Century King James, the one that starts “In the beginning God created the heaven and the earth.” This is a modern version that starts “First God made heaven & earth.”

The graphic shows the average credit card agreement at 12.4, but, in what I can only assume is a desperate effort to make us all feel better, it illustrates this with what is probably the most difficult sentence from the worst-case GTE Credit Union agreement. Nice try, guys.

A New York Times editorial measures at 17.2, meaning unless you have a little more than a year of grad school it is incomprehensible to you. Just as well, I suppose.

The Bill of Rights comes in at 22.6, or more than six and a half years of grad school. No wonder phrases like “Congress shall make no law” and “a well regulated militia” cause so much confusion.

But in a way this discussion of reading levels and card agreements is, you will pardon the expression, academic. Four in five Americans may not be able to read the agreements, but I am willing to bet that 99 in 100 have never tried.

Much as I applaud Capital One’s effort to rephrase their contracts into the monosyllabic vernacular (they use common short words) I think it is more good citizenship than good business. They could issue the agreements in Latin, which would be a nice tie-in with their anti-barbarian ad campaign, and I don’t think their business would suffer at all.

How often do the 80% of Americans who can’t understand their card agreements cancel the cards because of it? Has it, in fact, ever happened?

Telling consumers to read the agreements they sign, including credit card agreements, does indeed have the flaw that they may not understand them when they do. (CreditCards.com calls this a catch-22. It is not. That term is from a great work of American literature by the same name, in which…. Oh never mind.)

But let us all be honest and admit that the core problem is not that Johnny can’t read his card agreement, it is that he won’t. It is not the evil banks writing obscure prose that are at fault. Indeed, it seems to me that they would generally prefer that consumers understand what is expected of them. But the consumers cannot be bothered. Just sign up for the card and assume that the rules are what you think they should be. If you get in trouble later on, well that’s what government is for, isn’t it?

[Photo – Lotus Head]

No Comments

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a comment

WordPress Themes