Over 90% of Non-College Educated Students Do Not Understand Credit Cards “Terms & Conditions”


The average American reads at an 8th-grade level, according to the National Adult Literacy Survey. Yet, the terms and conditions for one of the most commonly used financial products, credit cards, require a college education to be understood. 50 of the largest credit card providers in the USA were analyzed in VisibleThread’s latest report.

Not getting the message

“Our research highlights how the vast majority, a whopping 90%, of credit cards come with conditions that most Americans can’t understand,” says Fergal McGovern, CEO of VisibleThread. “At the same time, Edelman’s Trust Barometer charts the decline in trust levels consumers feel in financial services. When asked what product or service will help to restore trust, the number one response is easier to understand terms and conditions. Yet banks aren’t getting the message – or they’re ignoring it,” McGovern concludes.

Key findings

In Q4 of 2018, VisibleThread conducted research into credit card terms to see if leading card providers communicate clearly with their audience. The results clearly showed this not to be the case:

  • 90% of Terms & Conditions require a college education to be understood.
  • Outsourcing credit card services alienates up to 60.8% of customers.
  • Only one (out of 50) sets of terms is easier to read than Moby Dick.
  • Only 2 sets of terms have an acceptable complex word density.
  • All sets of terms analyzed communicate in an academic tone with overuse of passive voice.
  • No credit card sets of terms score at the recommended level of long sentences.

Regaining trust

A clear communication strategy is a fast and simple way to increase trust from customers.

Technology can help. With artificial intelligence (AI) and natural language processing (NLP) solutions, plain language programs are now easier to implement and much more likely to succeed.

“Many credit card providers could make improvements quickly. Remove passive voice, use shorter sentences and communicate in simpler language. Your customers will feel more trust in your brand and support you with their business,” says McGovern.

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