On Friday, January 29th, I made a CARD Act presentation at the Federal Reserve Bank of Atlanta. One of the CARD Act provisions requires that credit card issuers notify their cardholders at least 45 days in advance if the terms of their account are going to change adversely. Specifically, cardholders must be notified if their interest rate will increase or if an annual fee will be implemented.
My hypothesis is that the notice is irrelevant, because most consumers don't read the mail that comes from their credit card issuers unless it's their statement. And since I had 100 people in the room, I felt it was time to test my theory. I asked the crowd, "How many of you read the non-statement mail (what some consider to be junkmail) you get from your credit card issuers?" Three people initially raised their hands. After a few seconds a fourth raised his hand. I'm calling his pause my “"margin of error."
So, there you have it. It's very possible that only three percent of the population reads the notices from their credit card issuers. Now, I recognize this is a bold and empirically unstable statement, but I have reason to believe it's actually inflated. The people in the room were all bankers, financial counselors, finance professors, or otherwise deep in the finance industry. I would expect the percentage from that group to be much higher than a more reasonable cross section of the population. So three percent might actually be on the high end.
Either way, I still believe the 45-day notice provision is the most meaningless of all the CARD Act provisions. And now I have proof, albeit "kind of" proof.
John Ulzheimer – Credit scoring and credit reporting expert and author, John is the President of Consumer Education for Credit.com. Formerly with Equifax and Fair Isaac, John shares his unique insight of the inner workings of credit scoring models and the credit reporting industry on CreditBloggers.com.