Credit cardholders have little awareness
of changes in their cardholder agreements

San Diego, CA - "The growth of consumer credit and indebtedness has been explosive over the past ten years. Still, relatively few Americans bother to read over their credit card agreements when they first sign up perhaps missing important clauses such as 'universal default' and any limits on how long a low-ball interest rate might last. Now, according to a new survey conducted earlier this year by Auriemma Consulting Group (ACG) of Westbury, NY, cardholders pay even less attention to changes in their cardholder agreements.

"Credit card issuers have long known about this fact, but never talk about it," said Paul Richard, a registered financial consultant (RFC) and the Executive Director of the award winning, nonprofit Institute of Consumer Financial Education (ICFE) based in San Diego, CA. The ICFE is dedicated to helping consumers become better spenders, regular savers and wise users of credit.

In telephone interviews with some 832 consumers who use one card most frequently, ACG reported that only about a third were aware that their card had been repriced or had their terms modified. About 60 percent said no and another eight percent indicated they didn't know.

Among the 272 respondents who said their terms or pricing had changed, 57 percent said the changes did not change their opinion of their issuer. Among the 42 percent, however, who said there was an impact, 60 percent of them reported a change in their opinion of the issuer for the worse and 36 percent said it was better.

"We didn't specifically ask what was the cause or reason for the repricing," said ACG's C. Scott Strumello. "I would say in the majority of cases when you're getting a change in terms.. the terms are seldom in the cardholder's favor," he added.

Strumello says because that well over half of the repsondents had no change in their opinion of the issuer after a change in terms probably indicates that many people don't read the issuers notice or understand it. The reasons for that may include the legalese of notices and the difficulty of assessing the importance or degree of the change unless the new notices is read in conjunction with earlier cardholder agreements or change-of-term notices, Strumello explained.

"Unless their APR is going up by a dramatic amount, it's not something they notice until much, much later," Strumello said, adding "Those who transfer balances seem to have the best recall of terms or changes in their card pricing." No group surpassed 50 percent in the awareness category. Of college grads and heavy card users 38 percent were aware of changes, light card users, non-balance transfers and non college grads were all under 30 percent awareness.

For more information about a credit term changes and universal default, visit the ICFE's Web page at: OR contact Paul Richard, RFC at 619-239-1401. To receive the same information by mail, please send $1 and a self-addressed, 60 cent stamped envelope to: ICFE, Credit Report Review,, PO Box 34070, San Diego, CA 92163-4070.