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Say Buh-bye to all that legalese clogging up your credit card agreements.The Consumer Financial Protection Bureau just unveiled a new prototype that digs important info like fees, pricing and late payments out of the fine print and lays it out front and centre.
It’s the latest move in the newbie watchdog’s ambitious Know Before You Owe campaign, which seeks to crack down on shady credit lending practices.
The agency will start by rolling out the new agreement with the Pentagon Federal Credit Union, gleaning feedback from the bank’s more than 1 million members and 350,000 cardholders.
“Credit cards can be complicated, with many moving parts that impact the cost to consumers,” said Raj Date, the special advisor to the Secretary of Treasury on the CFPB. “With a short, simple, easy-to-understand credit card agreement, consumers can clearly see the terms of the deal and make the decisions that are right for them.”
At first glance, the form looks nothing like those fat multi-fold packets banks hand over to credit applicants. For starters, your eyes won’t immediately begin to glaze over the minute you start to read.
That’s probably because it’s a fraction of the usual length of agreements, clocking in at 1,100 words versus the standard 5,000.
The colours pop off the page and all the most important questions – like “What If I Pay Late?” and “What Are The Charges?” – are written in big, bold type.
Whether the new form would keep credit companies from tacking on superfluous fees is left to be decided, but at the very least it will give consumers fewer reasons to complain about hidden billing practices – one of the most common complaints.