Never Read Your Credit Card Contract? It Might Cost You

What's Hot


The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

How a Mexican Tariff Will Boost the Cost of 6 Common PurchasesFamily

This Free Software Brings Old Laptops Back to LifeMore

How to Protect Yourself From the ‘Can You Hear Me?’ Phone ScamFamily

Report: Walmart to Begin Selling CarsCars

Where to Sell Your Stuff for Top DollarAround The House

Is Your TV Tracking You? Here’s How to Tell — and Prevent ItAround The House

11 Staging Tips to Help You Get Top Dollar When Selling Your HomeAround The House

21 Restaurants Offering Free Food Right NowSaving Money

20 Simple Hacks to Make Your Stuff Last LongerAround The House

4 Car Insurers That Might Raise Rates Even When the Accident Wasn’t Your FaultCars

How to Invest If Trump Kills the ‘Fiduciary Rule’Grow

12 Surprising Ways to Wreck Your Credit ScoreBorrow

8 Tuition-Free U.S. CollegesCollege

These Are the 25 Best Jobs in the U.S.Jobs & Work

9 Secret Ways to Use Toothpaste That Will Make You SmileAround The House

The 2 Types of Music That Most Improve Dog BehaviorFamily

Only 26 percent of cardholders regularly read the legal contracts that govern credit cards. Find out why that's a mistake.

If you haven’t read your credit card agreement in a while — or ever — you’re not alone.

Only 26 percent of cardholders regularly read these legal contracts that govern credit cards, with 46 percent of cardholders never or hardly ever reading them, according to a recent analysis by CreditCards.com.

Matt Schulz, CreditCards.com’s senior industry analyst, explains:

“These contracts are so daunting that many people never even try to read them. But the sad truth is that experts say the average American reads two or three grade levels below the highest grade they finished in school, so even if they did try to read their credit card agreement, a lot of it would simply go straight over their heads.”

Credit card agreements are written at an 11th-grade reading level on average, based on the analysis of every 2016 agreement on file at the U.S. Consumer Financial Protection Bureau (CFPB). Half of American adults, however, read at a ninth-grade level or lower.

In a poll of 1,000 Americans, CreditCards.com found that the most common single word used to describe credit card contracts is “lengthy,” or synonyms such as “long,” “wordy” and “verbose.”

Credit card agreements are 4,900 words long on average, a decrease of only 500 words since 2011, when the CFPB launched a campaign to help simplify agreements. The federal agency’s prototype agreement contained about 1,100 words.

Obtuse agreements can cause more than confusion. As we explain in “The 10 Deadliest Credit Card Mistakes,” when you apply for a credit card, you are agreeing to take full responsibility for any legitimate charges made with the card. So you can’t afford to ignore the disclosures.

Kathleen Engel is a research professor of law at Suffolk University in Boston who has studied subprime and predatory lending. She tells CreditCards.com that unreadable agreements help protect lenders from lawsuits and help keep cardholders ignorant of how loans work.

Engel continues:

“People who understand what they’re getting pay less for credit than people who don’t.”

If you’re in the market for a new or better credit card, check out “Finding the Perfect Credit Card.”

How do you feel about credit card agreements? Sound off below or over on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: 8 Ways to Get Your FICO Score for Free

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,836 more deals!