New federal credit card agreement database not user-friendly
There's a wealth of information, but it lacks ways to find, sort it
By Dana Dratch
Federal Reserve's database of credit card agreements is a lot like a lazy,
teenage genius: Its potential is vast, but it still needs a lot of work.
advocates were thrilled when the Credit CARD Act of 2009 included a provision that
mandated creation of a database for credit card agreements. Visions of
consumers being able to instantly access their own card contracts or compare
terms prior to application warmed the hearts of money gurus and consumer
that the database has been up and running for a few months, reviews are
experts are thrilled that the information is available for study and
comparison. "It's pretty good," says Linda Sherry, director of national
priorities for Consumer Action, an advocacy group. "It's an
overwhelming amount of information."
concedes that, at least at this point, it may be more useful to advocates and
academics than to consumers.
perhaps not that useful for the average person who wants to compare credit
cards," she says. "As a researcher, it's wonderful to have all this data in one
Wu, staff attorney for the Boston-based National Consumer Law Center, agrees.
"I don't think it's meant to be a tool for comparison shopping," she says.
"This is probably more useful for advocates and researchers, or if someone
can't find their card agreement."
the database easy for consumers to use?
did some things well, and they did some things not so well, says Jennifer
Golbeck, co-director of the Human-Computer Interaction Lab at the University of
plus side: "They really make it obvious what you're able to do and how you're
able to do it," she says. The site is clear and uncluttered. Files are easy to
open and read, she says. Also, because text versions of the agreements are
available, users don't have to download PDF files or install Adobe if they
don't already have it
In addition, it allows you to search for your card issuer's regulator, in case you want to file a complaint.
minus side: Some of the text files have strange characters or weird formatting,
Golbeck says. But that problem could be easily solved by using "a simple filter on the file" prior to
posting, she says.
The credit card contract database
database, which went live May 24, 2010, is designed to hold contracts for all currently
offered cards with 10,000 accounts or more. Cards with fewer accounts, or
cards that are no longer being offered don't have to be included. It's updated
quarterly, with the next update scheduled for sometime in early September, according
to the Federal Reserve.
As of July 22,
more than 300 issuers post contracts for more than 1,300 different cards in the
database. Contracts are displayed in both PDF and text format. In many cases,
Spanish language versions are also available.
problem for consumers: labeling.
site, card agreements are listed by issuer name. So if your search pulls up a
long list of card agreements from one issuer -- some institutions have dozens --
there is no way to tell which is which without opening all of them, Golbeck
As a law professor who studies contracts, I
couldn't find my own credit card agreement.
Assistant Professor, University of Texas School of Law
to the confusion: Sometimes the same institution will have subsidiaries with
similar names or unfamiliar locations.
While some contracts specify which cards they
govern -- allowing consumers to search by that name and find the agreement
instantly -- others don't list a card name. So even if you read the entire document, you may not
be able to match a contract to a
"As a law professor who studies contracts, I
couldn't find my own credit card agreement," says Angela Littwin, assistant
professor at the University of Texas School of Law.
complaint: Some card agreement addendums are listed separately from the card
agreements themselves, says Littwin. So unless you know to search for them, you
may be missing part of your contract, she says. Her take: "Better labeling
would be huge. Putting an entire credit card agreement together would help."
Agreements, card names don't match
feature that would be useful: allowing consumers to search all contracts by the
marketing names of the cards, says Littwin.
some issuers post separate files in English and Spanish, the site doesn't label
files for language. Consumers have to open them to find out which is which.
several consumer advocates say that the major language barrier for consumers is
the legalese of the contracts themselves. "It's math, it's law, it's very
complicated," says Lauren Bowne, staff attorney for Yonkers, N.Y.-based Consumers
the Federal Reserve posts the files and maintains the site, each individual
card issuer is responsible for producing
the computer files containing its agreements, according to the Federal
quality varies widely. Some agreements are reproduced in small type with a
multitude of pages per screen, while others are clear, clean and easy to read.
shortcut: if you're already a cardholder, go to the issuer's site and either
download the contract for your card or call to have it sent to you.
for a one-stop tool to compare terms and conditions? Check out the Federal
Reserve's Survey of Credit Card Plans,
which is updated twice a year. It contains items like interest rates, grace
periods, annual fees and contact phone numbers. And you can search by
institution name, APR or annual fee.
the credit industry believe the database is already a hardship for issuers. "I
think the regulation is already onerous and burdensome on the industry," says
Chris Stinebert, president and CEO of the American Financial Services
Association, a Washington, D.C., trade group for the consumer credit industry. While he
notes that issuer "compliance has been pretty good," Stinebert admits that he's
"not sure how useful" the database is to consumers.
time is needed to get a better sense of reaction from both consumers and issuers,
he says. "At least six months."
Federal Reserve is not specific regarding its plans for the database, except that it will get better. "It's
our expectation that the database will be refined and modified to make it
easier for consumers to navigate the site," says Susan Stawick, spokeswoman
for the Federal Reserve.
the picture further: A new federal Consumer Financial Protection Bureau, mandated by the Wall Street reform law but yet to be
created, could eventually take over management of the database.
A wish list
relatively simple changes could make the database a lot easier for consumers to
use, says Golbeck.
label which card each agreement governs and perhaps allow consumers to search
by the marketing name of the card. This "would not be hard from a technical
standpoint," she says.
"have something that summarizes salient parts of the agreement," says Golbeck, such as interest rates, fees, rewards, etc. "That would make it much
easier," she says.
add a comparison tool that would allow consumers to look at how those important
factors stack up for the handful of cards that interest them. Creating that
kind of tool is a lot easier than most would think, Golbeck says. "It would
take about a half hour of programming."
See related: MAIN STORY: Credit cards unreadable to 4 of 5 Americans, 10 most unreadable credit card agreements, 10 most readable credit card agreements, 10 wordiest credit card agreements, Readability of credit card agreements from biggest 20 banks, How credit card agreements' readability compares to familiar documents, Quotable: What lawmakers, consumer activists, bankers say, 3 language experts try to make sense of a card agreement, Video: Consumers try in vain to understand credit card agreements
Published: July 22, 2010