The federal Fair Credit Billing Act allows you to withhold payment on any damaged or poor-quality goods or services purchased with a credit card--even if you have Illustration of an open box with a broken cup beside it. accepted the goods or services--as long as you have made an attempt to solve the problem with the merchant.
The sale must have been for more than $50 and must have taken place in your home state or within 100 miles of your home address. You should notify the credit card company in writing and explain why you are withholding your payment.
You may withhold the payment while the credit card company investigates your claim. If you pay the charges for the goods on your credit card bill before the dispute is resolved, you will lose your right to make a claim.
Thursday, July 16, 2009
What can you do about billing errors?
The federal Fair Credit Billing Act covers billing errors. Examples of billing error are
 | A charge for something you didn’t buy |
| A bill for an amount different from the actual amount you charged |
| A charge for something that you did not accept when it was delivered |
| A charge for something that was not delivered according to agreement |
| Math errors |
| Payments not credited to your account |
| A charge by someone who does not have permission to use your credit card |
If you think your credit card bill has an error, take the following steps:
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Write to the credit card company within 60 days after the statement date on the bill with the error. Use the address for “billing inquiries” listed on the bill. Tell the company
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Pay all the other parts of the bill. You do not have to pay the “disputed amount” or any minimum payments or finance charges that apply to it.
If there is an error, you will not have to pay any finance charges on the disputed amount. Your account must be corrected.
If there is no error, the credit card company must send you an explanation and a statement of the amount you owe. The amount will include any finance charges or other charges that accumulated while you were questioning the bill.
What are your liability limits?
If your credit card is lost or stolen--and then is used by someone without your permission--you do not have to pay more than $50 of those charges. This protection is provided by the federal Truth in Lending Act. You do not need to buy “credit card insurance” to cover amounts over $50.
If you discover that your card is lost or stolen, report it immediately to your credit card company. Call the toll-free number listed on your monthly statement. The company will cancel the card so that new purchases cannot be made with it. The company will also send you a new card.
Make a list of your account numbers and the companies’ phone numbers. Keep the list in a safe place. If your wallet or purse is lost or stolen, you’ll have all the numbers in one place. Take the list of phone numbers--not the account numbers--with you when you travel, just in case a card is lost or stolen.
Does the card offer incentives and other features?
Many credit card companies offer incentives to use the card and other special features: | |
| Rebates (money back) on the purchases you make |
| Frequent flier miles or phone-call minutes |
| Additional warranty coverage for the items you purchase |
| Car rental insurance |
| Travel accident insurance or travel-related discounts |
| Credit card registration, to help if your wallet or purse is lost or stolen and you need to report that all your credit cards are missing |
| Credit cards may also offer, for a price, | |
| Insurance to cover the payments on your credit card balance if you become unemployed or disabled, or die. Premiums are usually due monthly, making it easy to cancel if the payments are higher than you want to pay or you decide you don’t need the insurance any longer. |
| Insurance to cover the first $50 of charges if your card is lost or stolen. Under federal law, you are not responsible for charges over $50. |
Before you sign up to pay for any of these features, think carefully about whether it will be useful for you. Don’t pay for something you don’t want or don’t need.
What kind of card is it?
Most credit card companies offer several kinds of cards: | |
| Secured cards, which require a security deposit. The larger the security deposit, the higher the credit limit. Secured cards are usually offered to people who have limited credit records--people who are just starting out or who have had trouble with credit in the past. |
| Regular cards, which do not require a security deposit and have just a few features. Most regular cards have higher credit limits than secured cards but lower credit limits than premium cards. |
| Premium cards (gold, platinum, titanium), which offer higher credit limits and usually have extra features--for example, product warranties, travel insurance, or emergency services. |
What are the cash advance features?
Some credit cards let you borrow cash in addition to making purchases on credit. Most credit card companies treat these cash advances and your purchases differently. If you plan to use your card for cash advances, look for information about
| Access. Most credit cards let you use an ATM to get a cash advance. Or the credit card company may send you “checks” that you can write to get the cash advance. |
| APR. The APR for cash advances may be higher than the APR for purchases. |
| Fees. The credit card company may charge a fee in addition to the interest you will pay on the amount advanced. |
| Limits. Some credit cards limit cash advances to a dollar amount (for example, $200 per cash advance or $500 per week) or a portion of your credit limit (for example, 75% of your available credit limit). |
| How payments are credited. Many credit card companies apply your payments to purchases first and then to cash advances. Read your credit card agreement to learn how your payments will be credited. |
What are the fees?
Most credit cards charge fees under certain circumstances:
| Annual fee (sometimes billed monthly). Charged for having the card |
| Cash advance fee. Charged when you use the card for a cash advance; may be a flat fee (for example, $3.00) or a percentage of the cash advance (for example, 3%) |
| Balance-transfer fee. Charged when you transfer a balance from another credit card (Your credit card company may send you “checks” to pay off the other card. The balance is transferred when you use one of these checks to pay the amount due on the other card.) |
| Late-payment fee. Charged if your payment is received after the due date |
| Over-the-credit-limit fee. Charged if you go over your credit limit |
| Credit-limit-increase fee. Charged if you ask for an increase in your credit limit |
| Set-up fee. Charged when a new credit card account is opened |
| Return-item fee. Charged if you pay your bill by check and the check is returned for non-sufficient funds (that is, your check bounces) |
| Other fees. Some credit card companies charge a fee if you pay by telephone (that is, if you arrange by phone for payment to be transferred from your bank to the company) or to cover the costs of reporting to credit bureaus, reviewing your account, or providing other customer services. Read the information in your credit card agreement to see if there are other fees and charges. |
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