Regardless of whether you’re using your credit card to buy a laptop or laundry soap, you have rights and responsibilities under the law. Getting a good grip on the safe use of credit cards can help you avoid a credit calamity.
Pay By the Due Date
It’s important to pay your bill on time. If you don’t, count on paying late fees and additional finance charges.
When you make a payment, your card issuer generally must credit your account the day they receive it, but there are exceptions.
- Your issuer can specify reasonable requirements for payment. For example, your issuer can set a reasonable cut-off hour for your payment to be received for crediting on that day, but generally, it can't be before 5 p.m. on the due date at the location the issuer specifies.
- Your issuer can require that you include an account number or payment stub with your payment.
- Your issuer doesn’t have to credit your account the day your payment is received if a delay won’t result in a charge to you.
To help avoid additional charges, follow your issuer’s payment instructions. Sending your payment to the wrong address — even if the payment is received and accepted at some other office of the issuer — could delay crediting your account for up to five days. If you pay by mail and misplace your payment envelope, look for the payment address on your billing statement or call the issuer for the correct address for payments. If you pay your bill online, set up a reminder a week or so before the bill is due to be sure you pay on time and to the proper electronic address. Set up a return electronic notice showing the company received your online payment. No matter what method you use, check your billing statement to be sure you have the right due date and location for each account.
Automatic debiting to your bank account can be a convenient way to pay bills, but there are factors to consider. For example, the amount due each month could vary, and you would need sufficient funds in your bank account to pay it. Otherwise, you could overdraw your account, be charged for insufficient funds, and damage your credit rating. Under federal law, you can't be required to use automatic debits from your bank account to repay an extension of credit.
If you decide to set up automatic debits, the creditor must:
- clearly disclose the terms of the transfers;
- get your written or electronic authorization; and
- give you a copy of the authorization disclosing the terms.
Refunds, Errors, Disputes, and Unauthorized Charges
Refunds. If you have a credit balance on your account, you can keep it or write your issuer for a refund if the amount is more than one dollar. Your card issuer must send you a refund within seven business days of getting your request. If you don’t ask for a refund and you don’t make any other purchases for more than six months, the issuer must make a good faith effort to send you a refund.
Errors. Card issuers must follow rules for correcting billing errors promptly. They must send you a statement outlining these rules when you open an account, and then, at least once a year while your account is open. In fact, many creditors routinely include a summary of your rights with your billing statements.
If you find a mistake on your bill, you can dispute the charge and withhold payment of that amount while the charge is being investigated. The error might be a charge for the wrong amount, for something you didn’t accept, or for an item that wasn’t delivered as agreed. You still have to pay any part of the bill that’s not in dispute, including finance and other charges not related to the disputed amount.
To dispute a charge:
- Write to the issuer at the address indicated on your statement for “billing inquiries.” Include your name, address, account number, and a description of the error.
- Send your letter as soon as possible. It must reach the issuer within 60 days after the issuer mailed you the first bill with the error.
The issuer must acknowledge your complaint in writing within 30 days of getting it, unless they’ve resolved the problem. The issuer must resolve your dispute within two billing cycles or 90 days, whichever is later.
Disputes about Merchandise or Services. You generally can dispute charges for unsatisfactory goods or services (including issues about the quality of an item) if you made a good faith effort to resolve the dispute with the seller, if the charge is for more than $50, or if you made the purchase in your home state or within 100 miles of your current billing address. In addition to disputing the charge with the issuer, you may want to consider filing an action against the merchant in small claims court.
Unauthorized Charges. If your credit card is lost, stolen, or used without your permission, you can be responsible for up to $50. If you report the loss before the card is used, you're not responsible for any unauthorized charges. But if a thief uses your card before you report it missing, the most you will owe for unauthorized charges is $50. If the thief uses your card number — but not your card — you are not responsible for the unauthorized charges.
To minimize your liability, report a loss as soon as possible. Some issuers have 24-hour toll-free telephone numbers to accept emergency information. It’s a good idea to follow-up with a letter: include your account number, the date you noticed your card missing, and the date you reported the loss. Keep a copy of the letter for your files.
Security Tips and More Information
- Never lend your card to anyone.
- Never sign a blank charge slip. Draw lines through blank spaces on charge slips above the total so the amount can’t be changed.
- Never put your account number on the outside of an envelope or a postcard.
- Always be cautious about disclosing your account number on the telephone, online, or other communication device unless you know the person you’re dealing with represents a reputable company.
- Keep your receipts and print out online receipts so you can reconcile the charges on your bill.
- Carry only the cards you expect to use to minimize the damage of a potential loss or theft.
- Keep a record – in a safe place separate from your cards — of your account numbers, expiration dates, and phone numbers of each creditor to report a loss quickly.
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