Cardholder Protections and Rights

Just because a company has given you a credit card, essentially loaning you money doesn’t mean you should let the company push you around. When problems arise you do have options. A good consumer knows what these are and protects themselves. Cardholders should know what their rights and protections are. The best way to guard against paying for errors is to keep a close eye on your bills and make sure they are accurate. Keep your receipts handy and when the bill comes from the credit card company, compare them. If there are errors you should call and have it fixed immediately. Good customers can also shield themselves from rising interest rates on their cards. Sometimes making a simple five-minute call can get you significantly lower rates. If the card company hesitates, tell them you are going to switch to another company who is offering you a better deal. Protect your credit score by checking it annually and making sure that the information is accurate. If you find problems, deal with them immediately. Though it may surprise you, the truth is that it is entirely your own responsibility to insure the accuracy of your credit report. The agencies only post what the credit card companies give them. So follow up both over the phone and in writing if you discover errors or worse, identity theft. The good news is that if someone does scamper off with your credit card and starts racking up charges, you are not responsible. In fact the federal government has a rule limiting your liability to fifty dollars max. Most credit card companies offer fraud protection as well, so usually you will pay nothing at all on those bogus bills. The most important thing is to call your credit card company the minute you notice something is wrong. Generally they will freeze that card number and issue you a new one. Follow up later in writing just to make sure. As always, it’s a good idea when speaking on the phone to get the name of the person with whom you spoke and reiterate in your letter what was discussed and agreed upon. There are a few other ways you can protect your credit card when you shop on-line. Some companies offer special single-use credit card numbers that are good for one transaction only. This way if someone steals that number, it won’t get them very far. Some firms also offer the option for extra passwords to increase security. None of these solutions is perfect and each has its own limitations. The idea though is to think and act proactively and do what you can to keep your credit secure. You may not know this but if you make a purchase with your credit card and the merchandise is faulty or substandard, you are protected by something called the Fair Credit Billing Act. In a nutshell, if the vendor is unwilling the give you a refund, your credit card company might take up the cause. There is a fairly specific procedure to follow and there are limitations but when other solutions fail this may do the trick. The key to success is to move quickly (60 days or less) and be precise and courteous when dealing with the merchant and the credit card company. Keep records of everything you send out to the vendor and credit card company including notes about any discussions had by phone. The credit card company will look into the matter and decide whether or not your claim to withholding payment is justified or not. If not, then you will have to pay the amount owed plus any finance charges. So as with all things, be careful when using your credit card. But know that when things go wrong, as they sometimes do, you do have some options. Just take good notes!