If your answer is no, don't feel so bad. Even the best legal minds who do say they are generally unreadable, meant to trick consumers and allow credit card companies a ridiculous amount of leeway in changing interest rates and payment deadlines.
One of those top minds belongs to Elizabeth Warren, a Harvard Law professor and an expert on the middle class and debt. Interviewed on the PBS show NOW that aired this week, Warren said that the average credit card contract in 1980 was a page and a half long. It basically covered the card's interest rate and what happens if you pay the balance late.
Recently, Warren (citing the Wall Street Journal) said the average contract is 31 pages long. She's a contract lawyer and says she can't decipher her credit card contracts. But she knows this: The lengthy legalese gives the companies power to change interest rates and deadlines pretty much whenever they choose, and there is no government entity that can stop them from doing so.
So much advice regarding credit cards has centered on doing research to find cards with the lowest interest rates and fees, but after going through the trouble of doing that, you can be socked with a high double-digit interest rate at any given moment.
Warren, who also chairs the Congressional panel charged with overseeing the U.S. Treasury's spending of the bailout funds, said the "sweet spot" for credit card companies are consumers who are just making it, using credit cards to bridge gaps in their income, then stumble because of a mistake or a life occurrence and make a late payment. Then, the companies can pounce, piling on late fees and higher interest rates and hoping to milk those consumers for higher profits as long as possible.
I love this analogy she makes -- that we are protected from buying toasters and other products that will explode because we have a Consumer Product Safety Commission that provides basic safety regulations for just about everything we touch, wear, eat, and smell. "But, you can buy credit cards that will take a family that's making it month by month—they're using it the way the card is supposed to be used. Just like plugging that toaster in and dropping the bread in it. Just like it's supposed to be used. And that card can explode on them and turn their financial lives upside down."
There are regulatory moves and Congressional bills that would curtail some of these unfair practices in play, but they are not expected to take effect until later this year. So until (or if there ever are) "basic safety standards" for credit cards, what can we consumers do? Here are a few things to remember, according to Manisha Thakor, co-author of "On My Own Two Feet: A Modern Girl's Guide to Personal Finance, on PBS.org: