Credit Cards: Your Rights and Protections
Federal law protects
consumers when they use credit cards. The protections include the following
items:
Prompt Credit for
Payment
A card issuer must credit your account on the day the issuer receives your
payment, unless the payment is not made according to the creditor's requirements
or the delay in crediting to your account does not result in a charge. To avoid
delays that could result in finance charges, follow the card issuer's
instructions about where to send payments. Payments sent to other locations
could delay getting credit for your payment for up to five days. If you lose
your payment envelope, look on the billing statement for the address for
payments or call the card issuer.
Refunds of Credit Balances
When you return merchandise or pay more than you owe, you have the option of
keeping the credit balance on your account or requesting a refund (if the amount
exceeds $1.00). To obtain a refund, contact the card issuer. The card issuer
must send you the refund within seven business days of receiving your request
(to protect yourself, make the request in writing). Also, if a credit balance
remains on your account for more than six months, the card issuer must make a
good faith effort to refund the credit balance.
Errors on Your Bill
Federal law provides specific rules that the card issuer must follow to promptly
correct billing errors. The card issuer will give you a statement describing
these rules when you open the credit card account and, after that, at least once
a year. In fact, many card issuers print a summary of your rights on each bill
they send you.
You must notify the card issuer in writing at the address specified for billing
errors when you find an error, and you must do so within 60 days after the first
bill containing the error was mailed to you. (For this reason, keep your credit
card receipts and promptly compare them when your bills arrive.) In your
notification letter, include your name, your account number, the amount of the
suspected error, and the reason why you believe that the bill contains an error.
The card issuer, in turn, must look into the problem and either correct the
error or explain to you why the bill is correct. This must occur within two
billing cycles and not later than 90 days after the issuer receives your billing
error notice. During the period that the card issuer is investigating the error,
you do not have to pay the amount in question.
Unauthorized Charges
Under federal law, if your credit card is used without your authorization, you
can be held liable for up to $50 per card. If you report the loss before the
card is used, federal law says the card issuer cannot hold you responsible for
any unauthorized charges. If a thief uses your card before you report it
missing, the most you will owe for unauthorized charges is $50. This is true
even if a thief is able to use your credit card at an automated teller machine
(ATM) to access your credit card account. To minimize your liability, report the
loss of your card as soon as possible. Some companies have toll-free numbers
printed on their statements and 24-hour service to accept such emergency
information. For your own protection, you should follow up your phone call with
a letter to the card issuer. The letter should give your card number, say when
your card was missing, and mention the date you called in the loss.
Disputes about Merchandise or Services
If you have a problem with merchandise or services that you charged to a credit
card, and you have made a good faith effort to work out the problem with the
seller, you have the right to withhold from the card issuer payment for the
merchandise or services. You can withhold payment up to the amount of credit
outstanding for the purchase, plus any finance or related charges. If the card
you used is a bank card, a travel and entertainment card, or another card not
issued by the seller of the defective merchandise, you can withhold payment only
if the purchase exceeded $50 and occurred in your home state or within 100 miles
of your billing address. If these conditions do not apply to you, you may want
to consider filing an action in small claims court -- an informal legal
proceeding that can be used to settle disputes. While the maximum amounts that
can be claimed or awarded differ from State to State, most small claims courts
hear cases involving amounts ranging from $25 to $2,000. Some states have
recently raised their limits to $5,000. Check your local telephone book under
your municipal, county, or state government headings for small claims court
listings.
Some Suggestions
- Shop around for credit
card terms that are best for you.
- Make sure you
understand the terms of a credit card plan before you accept the card. Review
the disclosures of terms and fees that must appear on credit-card offers you
receive in the mail.
- Pay bills promptly to
keep finance charges as low as possible.
- Keep copies of sales
slips and promptly compare charges when your bills arrive.
- Protect your credit
cards and account numbers to prevent unauthorized use. Draw a line through
blank spaces above the total when you sign receipts. Rip up or retain carbons.
- Keep a list of your
credit card numbers and the telephone numbers of each card issuer in a safe
place in case your cards are lost or stolen.
Next ==>>
What is a Credit Report (and How Do I Get Mine)?
Table of Contents:
-
How to establish
credit
-
Types of Credit Card Accounts
-
Precautions for Choosing or
Using a Credit Card
-
When You Receive Your Card
- Your Rights and Protections
-
What is a Credit Report (and How Do I Get Mine)?
-
How to Dispute Credit Report Errors
-
Unauthorized Use of Your Account: (What to Do if Your Identity
is Stolen)
-
Help and Resources
|
