Credit Card Offers Have Gotten 250% More Complicated Than They Were a Decade Ago

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It’s not just your imagination. Credit card offers really have gotten more complicated, and a new study proves just that.

How do you measure complexity? Very simply. The Center for Responsible Lending’s study looked at how many different numeric figures appeared on credit card offers sent out in the mail over the past years. Every credit card offer includes a “Schumer Box,” a section named for the then-Congressman who sponsored legislation that made it mandatory in 2000. Within the Schumer Box is a summary of terms that lists all of the pertinent figures (APR, annual fees, penalty fees, etc.), and that exists solely for the purpose of making the consumer’s decisions less complicated. But, as it turns out, this section has gotten increasingly complicated. The report states:

The average number of numbers appearing in the Schumer Box grew by 250% from 13 numbers in 1999 to a peak of 33 numbers in 2009.

Average number of numbers? You gotta love that a study discussing things that are unnecessarily complicated uses a phrase that makes my head hurt. But I know what they’re trying to say.

The credit card reforms of 2009 and 2010 have apparently successfully made offers a bit less complicated, as the average number of numbers in the summary of terms has since decreased to 26. So, by that measure, today’s average direct-mail credit card offer is “only” 200% more complicated than the average one sent out in 1999. Still, the study suggests that all those numbers make it difficult for a consumer to understand all of the factors involved and make smart decisions:

There is evidence that consumers cannot grasp anything close to 30 dimensions simultaneously when making a decision, with previous research suggesting the number may be closer to seven. With a typical credit card offer and average processing capacity on the part of the consumer, over 75 percent of the price information will not be fully taken into account.

It’s not only the “number of numbers” that confuses consumers, but also the language used in the agreements. Earlier this year, a study showed that 80% of adults don’t understand credit card agreements, which are written at a grade level that four out of five consumers just can’t comprehend.

So, are you smarter than 80% of your neighbors? You’d better hope so. Because the banks and credit card issuers are smart enough to realize that most consumers are too dumb to really grasp what’s going on.