Obama Unveils New East to Read Credit Card Agreements [AUDIO]
Do you understand all the fine print in your credit card agreement? If you don't, you're not alone. The Obama administration has unveiled a new project aimed at simplifying the language.
The prototype would list the various charges associated with the credit card in plain language that could be understood by a seventh grader.
Bruce McClary, a spokesman with Clearpoint Credit Counseling Solutions, says the new two-page form would highlight actual costs -- such as the interest rate, cash advances and transfers in large type.
"Knowing and understanding the terms, that's the foundation of healthy credit management and healthy debt management."
The White House says a recent study shows that about two-thirds of credit card users say they don't completely understand how their cards work.
"There are fees for everything in a credit card agreement, hidden fees that are buried in the fine print, and this puts everything in the light of day" said McClary.
He says its a real victory for consumers. "They get fewer pages to search through and its spelled out for them, what their costs will be in clear, easy to read print."
The proposed form will be tested at the Pentagon Federal Credit Union, which has roughly 350,000 cardholders.