Professor Elizabeth Warren has written a revealing article on the Credit Slips blog about arbitration clauses in credit card agreements. It seems that many credit card agreements contain provisions that require arbitration in the event of any lawsuit by a consumer. Further, the credit card user agreements often contain a waiver of the consumer's right to participate in a class action.
It turns out that the credit card companies have manipulated the system by choosing only arbitrators who rule their favor. Arbitrators who ruled against the credit card company were not chosen for any cases.
The class action waiver provision greatly benefits the credit card issuer by creating a barrier to a special kind of lawsuit known as a "class action." Class actions are usually put together by lawyers who have identified improper activity by a defendant that has affected thousands or millions of plaintiffs. Since each individual plaintiff may have only suffered a small amount of damages (perhaps only a few hundred dollars each), it is unlikely and impractical for these consumer plaintiffs to file an individual lawsuit.
I suspect that someone will challenge these waivers as being unenforceable. However, if the courts agree with the credit card issuer and stop class actions from going forward, then there is no practical restraint upon overreaching behavior by credit card issuers.
In the meantime, be aware that the fine print in those credit card applications may contain language that can negatively impact your interests.