Figuring out the fine print in those impossible-to-understand applications for credit cards and checking accounts might start to get easier.
JPMorgan Chase & Co. is among the banks that have introduced new checking accounts that are accompanied by summaries that use plain language and explain key features upfront, instead of burying them in fine print.
“It’s time to empower consumers,” said Susan Weinstock, director of Pew Health Group’s project that has studied checking accounts and came up with the model that Chase has embraced. “One of the ways is to provide information to them that is clear, precise and understandable.”
Pew introduced its sample form for checking accounts a few weeks after the Consumer Financial Protection Bureau, a new federal agency, announced its project to simplify credit-card applications.
Pew reviewed 250 checking accounts offered online by the nation’s 10 biggest banks. It found that the average length of all the disclosure documents totaled 111 pages.
The Consumer Financial Protection Bureau, citing a J.D. Power survey, says two-thirds of credit-cardholders don’t understand how their cards work or the long, complicated agreements that accompany them.
“People just don’t bother reading them because they’re so difficult to understand,” said Bill Hardekopf, CEO of Lowcards.com and an advocate for simpler forms.
The result of the confusing, hard-to-understand language can be costly for consumers, who run the risk of…
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