December 3rd, 2009
Bank Of America Introduces Credit Card Clarity
In a move that echoes the spirit of the CARD Act, Bank of America launched its Credit Card Clarity Commitment program, which gives BofA cardholders a one-page summary of easy-to-understand terms and conditions for its credit cards.
Bank of America, the nation’s largest credit lender, is currently mailing out its single sheet of need-to-know card information to all of its 40 million cardholders, explaining everything from balance transfers to cash advances, plus a summary of fees and clearly-stated payment information of how to keep the account in good standing. New BofA customers will also receive it starting next year.
The Credit Card Clarity Commitment program is an extension of other BofA examples of clarified and straightforward business practices. Similar proposals unveiled earlier this year are Bank of America’s clarity initiative for mortgages and the Bank of America Basic Visa, which features a one-page summary of terms and conditions as well as a fixed interest rate and flat late fee payment. This is also the first action taken by a major issuer to fulfill the “Plain Language in Plain Sight” provision of the CARD Act’s reforms, stating that issuers must disclose any and all information that would help customers make informed choices about credit use.
Of course, Bank of America’s olive branch to consumers may be less of an act of goodwill and more of a federally-mandated reform, or a last-ditch effort to appease frustrated cardholders. While this disclosure act is a good thing for BofA customers, Bank of America hasn’t been too popular with its cardholders lately. In the past few months, BofA has become notorious amongst issuers for its added annual fees, credit limit cuts, and a record number of charged-off accounts for uncollectible card loans that escalated to the highest percent charge-off rate of all major card issuers in October (source: eCreditDaily).
Other issuer-led efforts to educate consumers on credit cards and personal finance include Bank of America’s own online personal finance education site as well as a slew of personal financial management websites offered by several issuers to add more transparency to the mysterious, obscure policies of credit access and use.
“We are delivering simplicity and choice across our products and services that will help our customers better manage their finances. In the end, when our customers succeed, we will succeed,” said Brian Moynihan, BofA president of consumer, small-business banking and card services, in a statement. Clear, straightforward language and full disclosure from a credit card issuer? This may be the beginning of a better era of consumer-friendly banking.
At Credit Karma Blog, what goes around comes around… So what do you think about this post? Agree, disagree, or have something more to say? We’d love to hear your reactions!
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