Despite sweeping changes to credit card practices in the last two years, Americans are still stumped by the terms of their cards.
That's one of the key findings this week from the new federal watchdog group, the Consumer Financial Protection Bureau. The agency analyzed more than 5,000 complaints it received from credit card holders from the day it opened its doors July 21 through the third week in October.
Of those, 13.4 percent involved billing disputes and 11 percent involved the annual percentage rate or interest rate. The third most-cited issue at 10.8 percent was identity theft, fraud or embezzlement.
"We are learning that there is a lot of consumer confusion about credit card terms," Raj Date, special adviser to the Secretary of Treasury on the CFPB, said in a news release. "We will continue to work with consumers, credit card companies, government agencies and others to improve consumer education and ensure CFPB's regulation, supervision and enforcement efforts are effective."
The agency forwarded 8 in 10 complaints to issuers to be resolved. Of those, almost three-quarters were fully or partly resolved, according to the issuers. But consumers disputed that the claim was resolved in nearly 13 percent of the cases. One in 5 complaints was not resolved.
The results come after new changes took effect in the credit card industry last year. The Credit Accountability, Responsibility and Disclosure Act of 2009 banned some questionable-but-common practices including double-cycle billing, retroactive rate increases and short grace periods. It also capped certain fees issuers could charge in the first year of an account.
The CFPB said at the onset of its creation it planned to make credit card terms and conditions even easier for consumers to understand, so they could better compare cards and choose the best ones for them.
The agency is charged with giving a voice to consumers with respect to all financial products. The agency only takes credit card complaints at this time, but it plans to handle complaints for all financial products by the end of next year.
Have you used the CFPB yet?
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