The Federal Reserve, earlier in the week, introduced a website with the intention of creating a database of credit cards that can help customers compared the terms and conditions and rate of interest for close to 300 credit cards. A statement issued by Fed said that the reason for coming up with this website was to help customers get the right card for their needs.
While the objective of coming up with the website is indeed commendable, there are a number of loopholes that curtail it helpfulness for people who are shopping for credit cards. There are many factors that are hampering the effectiveness of this website.
1. The Federal Reserve has just collated the legal documents from various banks and financial institutions that issues credit cards and uploaded them online. This does not serve any purpose since the customer has to still go through pages of fine print to understand what the credit card has in store for them. This is still a time consuming process and not very different from what the consumers are currently doing.
2. On the website, people can only find the names of the companies that are offering credit cards and not the various types of cards that are being offered by each of them. This makes it very difficult for the consumers to navigate the website to find a particular card.
3. The lack of proper searching facility on the website is another drawback for the effectiveness. The website does not allow customers to search for information based on the annual fees, APR, late fees and other important criteria that play an important role while making a decision.
4. Another big drawback is that the website will not be updated in short intervals of time. The details on the website will reflect changes only once in three months by when, going by the current trends, a lot of changes would have taken place in the credit card industry. The rates and terms mentioned on the website will soon get outdated and will not be of much use to the consumers.
5. Financial institutions that have less than 10,000 using their credit cards and those banks and institutions whose credit cards are no more in the market do not find a mention in the database on this website. This can be a drawback to customer who already hold the credit cards of these banks and are looking for information.