The Truth of Credit

Honestly, the number of times I have told people to read their Card Holder Agreements has to be in the thousands. I’ll admit, I’ve never quite looked at mine until two days ago and that was just out of pure boredom. At first glance you can’t help but ask yourself, what kind of font are they using? They somehow fit a million words into an eight page document. The first few paragraphs seem pretty simple, basically stating that you agree to pay them and if you don’t this and this will happen. Once I reached the “How to Calculate the Average Daily Balance Subject to Periodic Finance Charges”, I almost fell asleep! How can anyone who doesn’t speak legalese understand this?

Here are some other terms that had me baffled:

• Skip Payment Option - I never knew this was even an option.

• Severability - Even after reading the definition, I still can’t explain it.

• Affiliate Sharing – You have agreed to share your personal information. Who knew?

• Debt Cancellation Tools - This must be offered to the 800 credit score crowd, because I have never heard of one.

• Arbitration - Did you know that if you don’t write to them you are forfeiting your right to seek a “claim” against the creditor? This will force you into arbitration.

I understand a lot of this stuff is necessary to protect the creditor, however, the late fees, charges, transaction fees and delinquency rates all are too much to understand. The government should force them to give “pictured” examples of how they calculate this crap.  Dumb it down for us please, perhaps then we would fully understand just what we are signing up for.  Oh, wait…that’s what they don’t want…now I get it! When is the last time you read your Cardholder Agreement?  Did you understand half of it? What do you think about giving a summary test to make sure people read it before they sign for the card? Only kidding!

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