You’re not the only one who hasn’t a clue about fees and rewards that come with your credit card.
That’s the complaint of many cardholders, who can’t figure how much that credit-card transfer will cost and how much one gets for rewards points, say card industry experts.
CardHub.com CEO and founder Odysseas Papadimitriou says there are big differences in how cards are disclosing vital information.
CardHub.com’s fourth annual credit-card application study rated the websites of the 10 biggest issuers for transparency.
“The worst-performing issuers were American Express and Barclays, with average scores of 78.33 percent and 73.3, respectively,” according to the study. “Capital One has the clearest credit-card applications.
“The areas in which the most ambiguity remains are the same as in previous years: information related to rewards redemption and information on balance transfer fees,” the report said.
Papadimitriou cited Barclays’ transfer offer as one example; he said it doesn’t clearly disclose a 3 percent fee. “The fee is in the agreement, but it is very hard to find,” he said.
American Express, he noted, disclosed its rewards points, but “it wasn’t clear what they meant.” In contrast, Chase, which rated highly in the CardHub study, is clear that 1,000 reward points means $10.
An American Express spokeswoman, Elizabeth Crosta, said the company is working to make its cards easier to understand.
At Barclay Card USA spokesman Kevin Sullivan said, “We recognize the value in ensuring clear and easy-to-read disclosures. The study has helped us to narrow our focus in efforts under way to improve these materials.”
Papadimitriou says there are several areas that should be easy for the cardholder to find and understand. These include:
- The introductory rate: This is a very low rate, also called the teaser rate. Cardholders it’s offered to them.
- Balance transfer fees: The cardholder should understand what he is paying for moving a balance.
- Annual fee: Many cards don’t charge them. Does yours?
- Rewards: Know how they work.
One change Papadimitriou thinks is overdue is in deferred-interest loans: seemingly low-interest loans in which, if one payment is missed, the cardholder is assessed a much higher interest rate for the entire loan.
“Those things,” Papadimitriou said, “should be outlawed.”