Capital One (NYSE: COF) and Bank of America (NYSE: BAC) Showing Greater Transparency to Credit Card Applicants

In a recent study by, Capital One (COF) and Bank of America (BAC) came in first and second in terms of disclosing essential information to consumers on their credit card applications.

One of the primary catalysts for the recently passed credit card law (Credit CARD Act) has been the need for greater transparency between banks and their customers. If this study is any indication, banks are already taking steps to show they’ve received the message.

The Summer 2010 Credit Card Application Study evaluated Capital One and Bank of America along with the other top 10 largest credit card issuers by market share of outstanding balances.

After Capital One (96.4%) and Bank of America (95%) was Wells Fargo (WFC) at 87.9%. The bank that scored the worst was U.S. Bank (USB) with a score of 59.3 percent.

The study put a premium on banks that listed essential information such as APRs, common fees, and rewards programs, on their credit card applications without requiring consumers to read through fine print. When given this information, consumers find it valuable, but in far too many cases, they have to hunt for it – which they are less likely to do.

It should be noted that the study evaluated the ease with which the applicant can find essential information (and not whether or not they could find it). However, it clearly showed which banks are truly striving for transparency and which ones may still have a way to go.

Another positive for the report was a marked reduction in the use of open-ended language such as “as low as” and “up to”

Among other key findings, researchers found that many of the applications didn’t clearly disclose balance transfer fees, while most were clear about annual fees and how to earn rewards.

Finally, according to the study, applications for non-cash back rewards credit cards in general didn’t clearly define how much the rewards were worth, which study writers wrote “reinforces our opinion that cash back credit cards are the best type of rewards credit cards available.” researchers evaluated the online applications based on the ease with which they could locate the essential information. Issuers were assigned points for each card based on how visible this information was within the page, whether they had to click to a new page to find pricing information, and whether they had to read the fine print to find these key components.

When available, they evaluated two rewards credit cards and two non-rewards credit cards for every issuer.

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