Friday, March 23, 2018

Are Credit Card Agreements Too Confusing?




In the United States alone, over one-hundred million adults have a credit card. One of the most popular banks across the United States is Bank of America. Bank of America is worth trillions of dollars, a significant portion of which comes from interest and fees associated with credit card accounts. When someone signs up for a credit card, it is standard for a credit card agreement to be signed. A credit card agreement is supposed to outline term, conditions, penalties, and charges associated with using a credit card. Credit card agreements differ from one bank to another, but certain information is required to be considered legally sound. However, how this information is presented might cause problems for many Americans looking to get a credit card.

When a bank needs to convey a large amount of legal information, the official style as coined by Richard Lanham tends to be used. For the bank, the usage of the official style could potentially be viewed as necessary as a means of ensuring that all pertinent information is included. However, this can have a negative effect on the consumer attempting to get a credit card. For the example credit card agreement for Bank of America® Platinum Plus® and Classic Visa® and MasterCard® accounts, and World MasterCard® accounts that was chosen for this analyzation, the average grade level necessary to comprehend the document according to the Flesch-Kincaid Grade Level Readability Formula is 18.7. When taking into account that the average American reads at a seventh-grade level, a discrepancy between written information and actual comprehension becomes evident.

The Bank of America example credit card agreement utilizes the official style in a variety of ways. Most significantly, jargon from within the field and legalese are used widely throughout the document. For example, in a description of interest rates, the credit card agreement states:



Clearly, this portion of the document has heavy usage of terms that are not familiar to most Americans without some form of knowledge about banks and credit. The average American individual, maintaining a seventh-grade reading comprehension level, would likely not be educated about terms such as Balances Subject to an Interest Rate for Purchases, DPR, Interest Rate for Balance Transfers, Pre-Cycle Balance, among others. When terms such as these are included in somewhat vague and extremely complex sentences that are already difficult to comprehend, it becomes unclear to the average consumer how this important aspect of the credit card might work.

Beyond this, the Bank of America example credit card agreement contains many more extremely long and complex sentences. One example includes:

 

Not only are each of these sentences extremely long, they each contain multiple ideas per sentence. For example, the first sentence uses multiple appositives, a relative clause, and multiple prepositional phrases to name a few. Several complete thoughts are combined into one extremely long, complex, and confusing sentence. Relative clauses continue to be used heavily throughout the rest of the document. This allows multiple ideas to be presented in a single, very long sentence rather than broken up into multiple shorter, easier-to-digest sentences. The punctuation chosen for this document illustrates the official style as well, including many commas and semi-colons to separate the multiple clauses within each sentence. Passive voice is evident throughout the document, causing it to appear impersonal and disconnecting the reader, especially when coupled with the jargonistic language and highly elevated diction chosen. Similarly, there are no sub-headings or other attempts to separate different ideas for easier comprehension. It is likely that when someone encounters a passage this long with such comprehensive sentences, they will not read it closely.

When analyzing the official style as evidenced in this Bank of America Credit Card Agreement, one begins to question the reasoning behind the chosen style. On one hand, it is clearly necessary for the bank to include certain information, which could require some usage of jargonistic language and legal terms. However, usage of the official style in a credit card agreement could signify something more negative or sinister. It is likely that banks, most significantly the legal team who drafts the credit card agreements, are aware that most consumers are unable to understand the agreement they are signing. Taking this into consideration, it could be assumed that banks intentionally make credit card agreements unclear and difficult to comprehend as a means of ensuring that more people sign up for and use credit cards. When documents and contracts are lengthy and difficult to understand, it is more likely that people will simply not read them and just sign despite an unawareness of the terms of the agreement. Data from the Federal Reserve has revealed that credit card debt in America has reached over $1 trillion in 2017. So, it can be assumed that popular banks such as Bank of America make millions of dollars off credit card usage, debt, and interest. For this reason, it appears that banks would not have a major enough incentive to draft credit card agreements that would make sense to a greater portion of the American population. They are benefiting from so many people not understanding what they are agreeing to and potentially unknowingly misusing their credit cards, resulting in more charges, debt, and interest to be collected by the bank. For ethical reasons, it could be argued that banks should simplify credit card agreements so consumers can understand exactly what they are getting themselves into when signing their names, possibly saving millions of Americans from unmanageable debt and associated difficulties. 

Sydney M.

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