Monday, October 30, 2006
The Usability of Credit Card Disclosure Materials
Earlier this year we conducted a usability evaluation of credit card disclosure materials for the Government Accountability Office. With credit card debt and personal bankruptcy at an all-time high, the GAO wanted to find out if there were any usability issues in the printed documents that card issuers use to communicate information about their rates and fees to consumers.
We used three methods to evaluate the disclosure documents: a readability analysis, heuristic evaluation, and a 12-person usability test.
From the readability analysis, we learned that most disclosure documents are written at a 10th to 12th grade level. That may sound pretty reasonable until you realize that nearly half of the U.S. adult population reads at or below an 8th grade level. We also discovered that the sections dealing with interest rates and how much you owe are written at a much more difficult level; some were estimated to require graduate-level education to understand.
The usability test identified things you would expect: difficulty finding information in the documents and difficulty interpreting the information correctly. But it also identified some things we didn't really expect. For example, the phrase "the terms [of this credit card] can change at any time for any reason" is repeated frequently in the disclosure documents. So much so that it appeared to become something of a deterrent to even using the documents. If terms can change at any time for any reason, many of our participants reasoned, why bother reading this cardmember agreement?
Read the GAO report Credit Cards: Increased Complexity in Rates and Fees Heightens Need for More Effective Disclosures to Consumers
To see the Washington Post article Credit Cards' Hidden Costs: GAO Study Finds Confusing, Sometimes Misleading, Practices
We used three methods to evaluate the disclosure documents: a readability analysis, heuristic evaluation, and a 12-person usability test.
From the readability analysis, we learned that most disclosure documents are written at a 10th to 12th grade level. That may sound pretty reasonable until you realize that nearly half of the U.S. adult population reads at or below an 8th grade level. We also discovered that the sections dealing with interest rates and how much you owe are written at a much more difficult level; some were estimated to require graduate-level education to understand.
The usability test identified things you would expect: difficulty finding information in the documents and difficulty interpreting the information correctly. But it also identified some things we didn't really expect. For example, the phrase "the terms [of this credit card] can change at any time for any reason" is repeated frequently in the disclosure documents. So much so that it appeared to become something of a deterrent to even using the documents. If terms can change at any time for any reason, many of our participants reasoned, why bother reading this cardmember agreement?
Read the GAO report Credit Cards: Increased Complexity in Rates and Fees Heightens Need for More Effective Disclosures to Consumers
To see the Washington Post article Credit Cards' Hidden Costs: GAO Study Finds Confusing, Sometimes Misleading, Practices
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We hope that our findings will help in the effort to make credit-card disclosure materials more understandable.
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