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In a recent study, Capital One (NYSE:COF) and Bank of America (NYSE:BAC) ranked the highest in clearly disclosing essential information on their credit card applications. The CardHub.com Summer 2010 Credit Card Application Study evaluated the top 10 largest credit card issuers on the extent to which they volunteered essential components, such as APRs, common fees, and rewards programs, without the applicant having to actively search for them.

Capital One and Bank of America were a close first and second place with scores of 96.4 percent and 95.0 percent, respectively. Wells Fargo (NYSE:WFC) followed with a score of 87.9 percent. The issuer that performed the worst, by a large margin, was U.S. Bank (NYSE:USB) with a score of 59.3 percent, followed by USAA with 77.5 percent and American Express (NYSE:AXP) with 78.3 percent.

The study focused on how useful a credit card application is without reading the fine print because most consumers have neither the time nor patience to search through the miniscule and extensive information in pricing disclosures to get what they need. Since the study evaluated the ease with which the applicant can find essential information (and not whether or not they could find it), the study determined which companies are striving for transparency and which companies are still trying to keep their customers in the dark.

The biggest deficiency in the key information listed above was clear disclosure of the balance transfer fee. This was often the most difficult to find of the identified elements, which is coupled by the fact that it is also the component that an applicant is least likely to look for.

Useful descriptions of rewards programs for non-cash back rewards credit cards were also lacking. Although it was usually easy to tell how to earn rewards (i.e. you earn 2 points for every dollar you spend on the credit card), it was often difficult to determine how much the points were worth. In order to discover whether 10,000 points were worth a stay at The Four Seasons or a Motel 6, the applicant often had to wade through pages of tiny print and in some cases go to another section of the website entirely.

On the positive side, the study found that ambiguous and open-ended language such as “as low as” and “up to” has significantly diminished, a sign that the new credit card law (Credit CARD Act) has begun to take effect.

The results of the study conclude that although clarity is on the rise, the clearest outcome is that consumers need to continue to be pro-active in searching for information to safeguard themselves from companies that are coming along slowly.

Disclosure: Author is long COF

Source: Study Finds Capital One, BofA Clearest in Disclosures