Your Credit Card Rights and Protections

	Prompt Credit for Payment
	Refunds of Credit Balances
	Errors on Your Credit Card Bill
	Unauthorized Credit Card Charges
	Disputes about Merchandise or Services
	Some Suggestions

Federal law protects consumers when they use credit cards. The protections include the following items:

Prompt Credit for Payment

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 credit card issuer. The credit 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 credit card issuer must make a good faith effort to refund the credit balance.

Errors on Your Credit Card Bill

Federal law provides specific rules that the credit card issuer must follow to promptly correct billing errors. The credit 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 credit card issuers print a summary of your rights on each bill they send you.

You must notify the credit 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 credit card account number, the amount of the suspected error, and the reason why you believe that the bill contains an error. The credit 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 credit card issuer receives your billing error notice. During the period that the credit card issuer is investigating the error, you do not have to pay the amount in question.

Unauthorized Credit Card 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 credit card is used, federal law says the credit card issuer cannot hold you responsible for any unauthorized charges. If a thief uses your credit 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 credit card as soon as possible. Some credit card 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 credit card issuer. The letter should give your credit card number, say when your credit card was missing, and mention the date you called in the loss. For more information, see Identity Theft Protection / Identity Theft Prevention (What to Do if Your Identity is Stolen).

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 credit 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 credit 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 credit card bills promptly to keep finance charges as low as possible.
  
  
• Keep copies of credit card sales receipts 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.