Can't understand the fine print in your credit card agreement? You may need a doctoral degree.

The language contained in some credit card agreements is written at a 27th-grade level, according to a new report by the U.S. Government Accountability Office. And many cardholder agreements today contain language requiring a minimum of a 15th-grade education, the equivalent of three years of college.

Yet with only about half of U.S. adults reading above an eighth-grade level, the report said, credit card disclosures may be meaningless to millions of Americans.

Even for those with financial backgrounds, like Matthew Larson, a certified public accountant who lives in Heber City, understanding the fine print is a puzzle.

"I think they are intentionally hard to understand," Larson said. "They bury a lot of traps in them. There is just so much ambiguity as far as how interest accrues. If you don't pay the whole amount off by the due date, you don't ever know if you are really paying interest or not.

"I've looked at credit cards recently, where if you have one late payment it takes the introductory rate from 1.9 percent to a 35 percent default rate."

Tom Beaty, a Salt Lake resident, said he recently called a customer service representative for his Chase Visa card to find out how much interest he had accrued after his zero percent introductory rate expired.

"He told me the calculation was on the back of my statement and that he could not give me the accrued interest," Beaty said. "I now understand why he could not calculate my interest. If the explanation of finance charges is so complicated that even the customer service representative has a problem with it, then how can just a normal consumer understand the language and the formula?"

Beaty is not alone. Interviews by the GAO with 112 cardholders showed that many people failed to understand the most basic terms of their card agreements, including when they would be charged for late payments or what actions could cause credit card companies to raise their interest rates.

"Disclosures by the largest issuers have various weaknesses that reduced consumers' ability to use and understand them," the report said. "These weaknesses included ... poor organization and formatting of information and their excessive detail and length. ... The disclosures buried important information in text, failed to group and label related material and used small type faces."

Lynn Strang, a spokeswoman for the American Financial Services Association, which represents credit card issuers, said disclosures are determined by existing laws.

"While the criticism seems to be directed at the industry, the industry is following certain requirements given to it," Strang said. "New card issuers follow the law in terms of placement, use of type faces and point size."

But if understanding the terms and conditions is frustrating, it is higher fees and penalties that could be sinking many consumers.

"According to the Federal Reserve's survey of consumer debt, the amount of credit card debt reported as outstanding rose from about $237 billion to more than $802 billion — a 238 percent increase between 1990 and 2005," the GAO report said. "One academic researcher noted that the rise in bankruptcies and charge-offs by banks in credit card accounts grew along with the increase in credit card debt during the 1973 to 1996 period he examined."

Late fees assessed by the top card issuers averaged $34 in 2005, an increase of 160 percent from $13 in 1995. In addition, over-limit fees in 2005 rose to an average of $30.81, up 138 percent from $12.95 in 1995.

In contrast, in the late 1980s and early 1990s, few issuers charged fees if cardholders made late payments or exceeded their credit limit. Late fees back then, the report noted, were typically between $5 and $10.

The report said card issuers have added fees for a host of other services, including cash advances and making a payment by telephone. Not all of these fees were disclosed in materials that issuers provided to prospective cardholders.

In addition, credit card issuers are sometimes assessing interest rates of more than 30 percent as a penalty to cardholders for making late payments or exceeding credit limits. The GAO report noted one instance in which a bank received complaints from consumers who were assessed over-limit fees that resulted from the balance on their accounts going over their credit limit, because their card issuer assessed them a late fee.

Cindy Zeldin, a federal affairs coordinator for Demos, a public policy and research organization, said credit card fees and penalties deserve more scrutiny by lawmakers.

"More and more Americans are turning to credit cards to serve as a safety net in terms of financial emergencies," Zeldin said. "The lending industry is able to take advantage of that situation with penalty fees and retroactive rate increases for relatively minor infractions."

The report cited one consumer group, which questioned whether submitting a credit card payment one day late made a cardholder so risky that it justified doubling or tripling the interest rate assessed on that account.

But despite such consumer issues, the popularity of credit cards has skyrocketed since the late 1950s, when the first cards were introduced.

In 2005, consumers held roughly 691 million credit cards, with transactions exceeding $1.8 trillion, as they charged everything from groceries and health-care expenses to college tuition and taxes.

Credit card companies maintain that there are many benefits to card membership, which include cash-back and airline travel incentives, rental car insurance or lost luggage protection and the reduced need for cash. Years ago, most credit cards charged similar interest rates, which ranged around 20 percent.

The six largest issuers, whose accounts represent 61 percent of all U.S. accounts, reported that the majority of their cardholders in 2005 had cards with interest rates lower than the rate that generally applied to all cardholders prior to about 1990. About 80 percent of active accounts were assessed interest rates below 20 percent as of Dec. 31, 2005. More than 40 percent of accounts were below 15 percent.

Of the 28 popular cards the GAO analyzed, seven cards offered prospective cardholders a low introductory rate in 2003, but 20 did so in 2005 — with most rates set at zero for about eight months.

The report said that the net interest margin for all banks that focused on credit card lending has ranged between 7.4 percent and 9.6 percent since 1987. Similarly, according to the data of five of the top six issuers, their net interest profits have been relatively stable between 2003 and 2005, ranging from 9.2 percent to 9.6 percent during this period.