ARLINGTON, Va. (TheStreet) -- Think back to the last time you applied for a credit card. If you're like most people, you probably didn't read the fine print. Who has the time, let alone the patience, to wade through all that tiny, dense text, right?
Unfortunately, credit card companies bury important account information in the fine print, and being unaware of their crucial information can lead to misuse. How can you avoid such an unfortunate event?
Find an issuer with transparent applications.
Credit card application study
According to Card Hub's 2011 Credit Card Application Study, Capital One (Stock Quote: COF) and Bank of America (Stock Quote: BAC) do the best job of the 10 largest credit card companies in the U.S. at presenting key account terms clearly within their applications.
This annual study examines multiple online credit card applications from each of those top 10 issuers and assigns each issuer a score based on how well it displays information about annual fees, the cost of revolving and transferring balances and on earning and redeeming rewards. As far as the study is concerned, information in the fine print doesn't exist.
Other major findings
Besides tapping Capital One and BofA as having the most straightforward applications, Card Hub's study revealed a number of other important facts and trends, including further proof for increasing transparency throughout the credit card industry. The highlights are as follows:
- Nine of the 10 largest credit card companies in the U.S. increased their application clarity ratings relative to last year -- Wells Fargo (Stock Quote: WFC) being the exception, but still falling less than one percentage point.
- The lowest score this year, Citi's (Stock Quote: C) 82.1%, was more than 20 percentage points higher than last year's 59.3%, belonging to U.S. Bank (Stock Quote: USB).
- U.S. Bank improved its clarity rating by more than 32 percentage points relative to last year.
- The most clearly listed terms across all issuers were: purchase APR, annual fee and the rewards earning policy.
- The least clearly listed terms across all issuers were: balance transfer fees and the rewards redemption policy.