Credit cards can be great in a pinch, but all that fine print can be hard to understand and what it says can turn your emergency card into a credit nightmare. The dense language typically thrown into credit card agreements can leave consumers with very little power and very little understanding on how they can avoid fees and prevent their interest rate from skyrocketing.
Earlier this week, the Consumer Financial Protection Bureau put out a prototype credit card agreement that it hopes will make agreements easier to understand for consumers, providing them with some debt relief. The agreement will go through testing phases and receive feedback from consumers on their understanding of their credit cards using the agreement.
The new model could cut credit card agreements from 5,000 to 1,000 words, simplifying its content so most people can understand what their credit card companies can and cannot do. For now, this agreement is just a model and credit card companies are not required to follow the prototype. Even though this model is not a mandate for companies to follow, it does help raise awareness of the current personal debt crisis facing many Americans.
The hope is to help Americans receive debt relief and get back on track toward financial stability. Understanding your credit cards, loans and other debt will help you make sound financial decisions.
Occasionally, people lose track of their expenses, run into an emergency situation or lose their job, causing financial hardship. Talking with an experienced debt relief attorney can help give you an understanding of your debt agreements and help you get on track to a better financial future.
Source: The Detroit News, “Feds try out simpler credit card agreement,” Candice Choi and Julie Pace, Dec. 12, 2011