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Can Big Banks Really Learn to Speak English?


Like most, I'm baffled by the vague language used in credit card notices. Here's how the new rules are going to help.

Just before Christmas, I received a letter from Citibank (C). Delighted -- I mean, no one bothers to write a real letter anymore -- I ripped open the envelope. That's when things went off the rails.

Citi was writing to explain some changes on the horizon, or possibly already in effect, related to my credit card. The bank wanted to let me know that they were going to increase my rate, or already had -- I'm just not sure.

The letter began like this:
The Changes. We are changing your Card Agreement. The changes will be effective for all billing periods beginning on or after December 3, 2008. The changes will be effective whether or not you receive a billing statement.
Not the warmest of openings, but I continued:
I. We are changing how we calculate your variable APR for purchases:

We are increasing your variable APR for purchases. Your purchase APR will equal the US Prime Rate plus 10.99% with a minimum APR of 16.99%. As of October 1, 2008, this purchase APR is 16.99%. This APR equals a daily periodic rate of 0.0465%.
From here I skipped ahead a few paragraphs is search of an anchor of some sort, just a line or two I might understand. I found:
Default APR. All your APRs (including promotional APRs) on all balance may automatically increase to the default APR if you default under any Card Agreement you have with us.
That seemed vaguely threatening. Especially since, as stated, "The default APR equals the greater of (1) the Prime Rate plus 23.99% or (2) up to 29.99%."

No matter. Many years of receiving such letters taught me exactly what to do: tear the thing in half, toss it into the recycling bin and hope that Citi wasn't planning to rip me off more than was already the case. I imagined thousands of other Citi clients doing pretty much the same thing, which was likely, says Deborah Bosley, principal of the Plain Language Group consultancy in Charlotte, NC. Unfortunately, she says, consumers have been trained to ignore incomprehensible bank letters about credit card agreements, personal loans, and other issues, regardless of the money-wasting consequences.

Bosley is on a crusade to wipe out doublespeak, and financial documents are her specialty. In recent years, she's been hired to deconstruct dense, legalese-ridden prose on behalf of institutions like TIAA Cref, Bank of America (BAC) and KPMG. She's also a board member of the Center for Plain Language, one of a handful of non-profit organizations that advocates for clear, reader-friendly letters in private sector and government literature. The group would like to help people like me understand official documents about health insurance, voting rights, or small loans -- and credit cards.

"We're getting information that is crucial to our financial life but is written in such a way that most of us not only don't read it but wouldn't understand it even if we read it," says Bosley.

General literacy isn't the problem, she emphasizes. Bosley herself has a Ph.D. in English and teaches English and Technical Communication at University of North Carolina Charlotte, but she finds it impossible to calculate a late fee using data found on the back of her monthly Wells Fargo (WFC) credit card statement. Her colleagues at UNCC are scientists, doctors, and philosophers, and they can't understand their loan documents or credit card literature either, she reports.

"If you turn over the back of any credit card statement, it's very hard to tell what your daily balance is," she says. "It's hard to understand the difference between your annual percentage yield and the interest rate itself, and difficult to know the conditions under which your rate would -- or frankly, will -- change."
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