If you have difficulty understanding your credit card agreement, you’re not the only one.
Most credit card agreements are beyond the reading ability of the average U.S. consumer, according to CreditCards.com, which analyzed more than 2,000 current card agreements. It found they’re written at an 11th-grade reading level on average. About half of consumers read at a ninth-grade level or below.
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“Unreadable contracts really hurt consumers because if you don’t understand what you’re signing up for, it can end up costing you a lot of money,” said Matt Schulz, CreditCards.com’s senior industry analyst. “If you don’t know all the fees that come with a card, for example, how are you supposed to work to avoid them?”
CreditCards.com found that 46 percent of credit cardholders “never” or “hardly ever” read the legal agreements that come with their cards.
The problem also has to do with the fact experts say the average American reads two or three grade levels below the highest grade they finished in school. So, even if they tried to read it, a lot of it would simply go straight over their heads, Schulz said.
By comparison, “Harry Potter and the Order of the Phoenix” is written at an eighth-grade reading level; the Book of Exodus in the King James Version of the Bible is written at a 10th-grade level and the U.S. Constitution is written at a postgraduate level.