While new laws were intended to clear up confusion over the costs of using credit cards, many consumers say they still don't understand key details of their accounts.
Of the more than 14,000 consumers who responded to J.D. Power's latest credit-card satisfaction survey, just 47% said they "completely" understand the terms of their cards. Among the customers who don't fully understand their cards' terms, 73% cited confusion over interest rates and 31% cited confusion over late fees.
The findings raise questions about new rules ushered in three years ago that were partly meant to eliminate unwanted surprises for the millions of Americans carrying plastic in their wallets.
The Credit Card Accountability, Responsibility and Disclosure Act clamped down on lenders' ability to raise interest rates without giving borrowers advance warning and put in place limits on the frequency and level of penalty fees they can charge in a single month.
Industry representatives note that banks are required to provide key disclosures to consumers. "Consumers by law receive multiple notices and reminders of important credit-card terms in a manner and format required by law so they are easy to notice on applications, with card agreements and on periodic statements," said Nessa Feddis, senior vice president of consumer protection and payments for the American Bankers Association.
Ms. Feddis and other experts note consumers' knowledge of card details may depend on how they use the products. For example, a consumer who pays a balance off in full and on time each month may not pay attention to the interest rate or late fee.
Customer satisfaction has risen consistently since the rules took effect in 2010, according to J.D. Power, suggesting consumers are happier with their credit cards today than they were before the law. In the latest survey, overall satisfaction increased 14 points to 767 on a 1,000-point scale, an all-time high.
But Jim Miller, senior director of banking services for the marketing-information firm, said the improving economy and consumers' increased confidence levels may be playing a role.
"One of the reasons that they're happier is they feel better about their personal financial situation and the economy," Mr. Miller said. Twenty-seven percent of participants said they were better off financially in the most-recent survey, compared with 23% last year and 20% in 2011.
Mr. Miller and other experts say improving transparency in such areas as fee disclosures, interest rates and rewards programs can help lenders retain customers as major credit-card issuers compete for the same set of consumers.
"Banks are very cost-conscious, and acquiring customers is expensive," said Christopher Donat, an analyst with Sandler O'Neill + Partners who follows credit-card lenders. "It's cheaper to retain a customer than to acquire a new one. It's a lower-risk strategy to try to keep your customers happy."
Some lenders have attempted to capitalize on consumers' aversion to fees and complex billing practices.
Discover Financial Services, which ranked second on J.D. Power's satisfaction index after American Express Co., this year rolled out a credit card called Discover It that doesn't charge a late fee the first time a customer misses his or her payment due date. It also doesn't revert borrowers to a higher "penalty" interest rate that is commonly applied by credit-card issuers when a customer misses a payment.
A Discover spokeswoman said the firm has made efforts to better educate consumers about its products, including rolling out an interactive guide to explain its cardholder agreement in layman's terms.
A spokeswoman for American Express, which took the top spot on the list for the seventh year ina row, said the firm has taken steps to increase awareness about its products by, among other moves, rolling out a new website this year that explains how customers can earn rewards, and making it possible for them to receive account alerts through Facebook's social-networking site.
Odysseas Papadimitriou, a former Capital One Financial Corp. executive and current chief executive of credit-card comparison website CardHub.com, said many of the industry's biggest players have room to improve when it comes to disclosures.
CardHub.com recently reviewed the 10 largest credit-card issuers' websites to gauge how easy it is to find information about rewards programs, fees, interest rates, balance transfers and other features. While overall transparency increased, some issuers continue to make lenders dig for information.
For example, some lenders post information about fees charged to transfer a balance from one card to another in a separate spot from where information is listed about the interest rates charged on balance transfers. That may cause consumers to overlook the fact that balances that are transferred are assessed both an interest rate and a transfer fee, Mr. Papadimitriou said.
Capital One, which ranked toward the bottom of J.D. Power's satisfaction survey, ranked the highest on CardHub.com's transparency study. The McLean, Va.-based lender said it has tried to make it easier for prospective customers to find information about its cards before applying by adding links to rates and disclosures at the top and bottom of its product pages, among other things.
American Express, which ranked second to last in CardHub.com's study, received high marks in that survey on clarity regarding its rewards programs and annual fees for cards that were reviewed. But it was dinged on clarity about the costs for balance transfers.
The American Express spokeswoman said being clear and transparent with customers is a top priority for the company.
"We look closely at all the feedback we receive and use this information to help us enhance and improve the overall card member experience," she said in a statement.
The Consumer Financial Protection Bureau, which monitors banks' lending practices, has taken steps to increase transparency for credit-card products, including introducing a sample credit-card agreement intended to make finding key information easier for consumers. However, some banking-industry representatives have raised concerns that adopting the agreement could open them up to litigation if certain legal disclosures are omitted.
Write to Andrew R. Johnson at andrew.r.johnson@wsj.com
