PhotoIt's no big secret that consumers love their credit cards. In fact, newly issued bank cards went up by nearly 37 percent in February 2012, according to Equifax.

Financial experts also say that 40 percent of Americans don't consider themselves to be financially literate, which can lead consumers to getting credit cards with poor rates, low credit scores, and a host of personal finance problems.

"Before the Credit CARD Act, 100 percent of the cards we looked at included practices regulators found to be harmful or unfair," said Nick Bourke, director of the Pew research group’s Safe Credit Cards Project. "The [credit] market really wasn't working. It was much more difficult for consumers to identify a good card from a bad one."

The report outlines that most credit card agreements aren't fully understood by the average American consumer, as statements are written at a 12th-grade reading level, and the average American's reading level stops at at ninth grade. This makes it difficult for many consumers to make the best choice in selecting a card, and makes it even harder to choose a card based on personal need.

According to the 2012 Consumer Financial Literacy Survey, 42 percent of Americans gave themselves a failing grade when asked to score themselves on how well they understood the area of finance. Additionally, the National Endowment for Financial Education asked teachers if they felt knowledgeable enough to teach personal finance to students, and add it to their curriculum. Nearly 20 percent sent they didn't.

So where can consumers go to learn about personal finance outside of a college classroom? Financial classes aren't something that's normally marketed to the consumer, and many times it's far easier to get a credit card than it is to receive a proper tutorial on them. Also, many credit card companies make great deals of money from the financially ignorant, so why bother to educate?

According to the three U.S. credit bureaus, 1 in 5 consumers have poor credit, and TransUnion says the average debt per cardholder came to $4,962 at the end of 2012's first quarter.

Financial experts also believe that an overload of financial information makes it extremely hard for the average American to make a balanced choice on a good credit card. Plus, being overwhelmed by constant offers from banks, retailers and telemarketers, could make the consumer quickly make the wrong card selection, just to remove that feeling of bombardment.

"Not everyone has the same needs so being able to compare features and benefits of multiple cards side by side can really help consumers find the cards that best suit their individual needs," said Stephanie Cobb, Business Developer for Credit Card Select. "Our Credit Card Comparison Tool allows consumers to add their favorite cards to a compare bin or shopping cart so they can easily come back to them later and compare their favorites side by side."

Credit Card Select went on to say that consumers should really understand the differences in each card and offer, and carefully choose a card that best suits their credit range, among other personal needs.

Consumers can better educate themselves by learning about credit laws, and by reading up on the Credit Card Act, that was passed by the United States Congress in 2009. The Credit Card Act has many provisions in place that deal with limiting how credit card companies can charge consumers.

Share your Comments