Consumers like credit cards, distrust companies, study says
Americans still love their plastic, even if they don’t trust the credit card companies dishing it out.
A study released Wednesday by CreditCards.com found 58% of respondents saying they “somewhat” or “strongly” agree with the statement: “I don’t trust credit card companies.”
At the same time, 82% considered having at least one credit card essential, and 77% said they liked the convenience of credit cards over using cash.
While seeing the pros and cons of credit cards, 78% agreed with the statement that nobody really reads the terms and conditions when signing up for a credit card.
One reason people don’t bother reading the terms is that the fine print is so difficult to decipher, said Ben Woolsey, the director of marketing and consumer research for CreditCards.com, a privately held company that offers consumers comparisons of credit cards.
The result is that people are later stunned by fees and penalties, Woolsey said.
Last year, Americans held about $850 billion in credit card debt, according to the Consumer Federation of America. That’s about four times the amount of credit card debt held in 1990.
In 2005, 35% of credit card accounts -- or 242 million cards -- incurred a late fee, according to the federation.
The Federal Reserve is reviewing regulations that would curb some of the credit card practices criticized by consumer advocates. The rules are expected to be adopted by the end of the year.
Peter Garuccio, a spokesman for the American Bankers Assn., said the results of the study “suggest a need for clearer, more consumer-friendly terms and conditions.”
Still, he noted, the majority of respondents said people don’t really read disclosure forms.