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A study released this week by the U.S. Government Accountability Office found that 20% of the accounts managed by the top six issuers were assessed interest rates above 20%, most above a 30% APR. The same issuers also reported that 35% of their active U.S. accounts were assessed late fees and 13% were assessed over-limit fees last year. The GAO also found in interviews with 112 cardholders that disclosures for credit cards were insufficient. According to a usability expert’s review, disclosures from the largest credit card issuers were often written well above the eighth-grade level at which about half of U.S. adults read. The GAO cardholder interviews found that most failed to understand key aspects of their cards, including when they would be charged for late payments or what actions could cause issuers to raise rates. These weaknesses may arise from issuers drafting disclosures to avoid lawsuits, and from federal regulations that highlight less relevant information and are not well suited for presenting the complex rates or terms that cards currently feature. Although the Federal Reserve has started to obtain consumer input, its staff recognizes the challenge of designing disclosures that include all key information in a clear manner. To view the entire report visit: “”:

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