It is a good practice to read the terms and conditions of any agreement document before you sign it. When you apply for a credit card, your signature on the credit card application acts as your acceptance of the terms and conditions that have been set by the issuing financial institution. Although you may think that the issuer has the upper hand in all matters related to using the credit, its not entirely true.
A credit card customer has certain rights, many of which are provided under the Fair Credit Billing Act. But the important thing about exercising these rights is making sure that you take all required steps in the right order and time frame specified. Let us discuss some of these problems and the steps that should be taken to solve them, starting off with the biggest credit problem, billing disputes.
Billing disputes
A Billing dispute is one in which the merchants charge the cardholders for items that have not been received by them or for items that were received defective. This happens all the time. For this kind of dispute, the Fair Credit Billing Act has given the customer the right to dispute such charges by taking the following steps.
Step 1
You must contact the issuer of the credit card in writing within 60 days of the date you received the first statement listing the disputed item. Make sure that you use the separate address listed for Billing Inquiries. Also make sure that your letter includes your name as listed on the cardholder account, account number, details of the disputed item and the error that you require to be corrected.
Step 2
After signing the complaint letter, it is better to make a copy for your records before sending out the letter. Make sure that you attach copies of all supporting documentation i.e. the dated receipts, etc. It is better to use a mailing method that provides proof of delivery such as certified mail. The issuer will notify you within 30 days of receipt of your written dispute and will then investigate the matter.
You are not required to pay for the item in dispute or the corresponding finance charges while the investigation is underway. In case the dispute sides in your favor, you are released from further liability in the matter. If not, you will be responsible for making the payment as outlined in cardholder agreement.
Unauthorized charges
This is one of the major problems that comes with credit cards. Identity theft is quite common and may lead to large amount of bills, of which you haven’t spent anything. However, the good thing is that as a cardholder, your responsibility for proven unauthorized charges is limited to $50; not the full amount.
Don’t panic if $50 seems a high price to pay for something you haven’t purchased as these unauthorized charges can easily build up into hundreds and thousands of dollars. So even though it seems high, $50 is a small price to pay if you’re ever a victim of identity theft.
When you cannot pay your bill
When you use credit cards to make purchases you’re not paying any money by promising to pay it later, therefore you are considered a debtor. If you’re not able to repay the credit debt in time, it is likely that a debt collector will contact you.
In the past, debt collectors had the facility to use all sorts of threatening and intimidating tactics in their efforts to collect debt. But fortunately, the Fair Debt Collection Practices Act now prohibits such unfair treatment of debtors. The Act also determines when and how debt collectors may contact debtors.
For example, debt collectors are not allowed to make false statements about you or threaten you about any consequences in case you are unable to pay the debt, such as saying that you’ll be arrested or that your wages will be added more if you don’t pay your debt in time.
But this does not mean that you don’t have to repay your debt any more. It just means that you have the right to be treated fairly when debt collection efforts are being made.
For more information
If you have any question regarding your credit card rights, try contacting the FTC at www.ftc.gov. It has all the information about credit card fraud, dealing with lost or stolen credit/debit cards, fair billing rights, unfair or deceptive business practices, Internet and phone orders, and much more. Information on these and other consumer issues is free.
