10 Things You Should Know About Your Credit Card
When it comes to credit cards, American’s are least educated people around the world. Our knowledge about them comes mostly from friends and family or credit card sales people. After a long search on forums and blog comments I have come up with the list of 10 things that most of people should know about their credit cards and they don’t. It’s my contribution to help you learn more about your own credit card rights and providing you means and methods to protect them
1) Your Credit Card is Not Valid Till You Sign it
There is a panel on the back of your card that says “Not Valid Unless Signed”. A large number of people ignore this or just write “SEE ID” or “CHECK ID”. They become very shocked when some diligent merchants refuse their card.
Let’s have a look at what VISA’s procedures says about what should happen when a customer presents an unsigned card:
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The merchant will ask for customer’s ID like Driving Licence or Passport.
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Customer will be asked to sign the card. If he signs it, the signature on the card will be compared to the signature on his ID.
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If customer refuses, the card will not be accepted.
It is a known fact that most of the merchants don’t follow this policy, but some like UPS are quite strict.
2) Your Liability For Unauthorized Use Of A Credit Card Can Never Exceed $50
Little is known that the Fair Credit Billing Act is your safeguard against damages due to unauthorized use of your credit card. We all know that If one reports a lost or stolen card before someone uses it, he or she is not responsible for any charges.
But even if you could not report it, before an unauthorized use, you are liable for a maximum of $50. Not a penny more…
PS: This does not apply to debit or ATM cards
3) A Merchant Cannot Ask For Your ID, Unless You Present An Unsigned Card
It is not appropriate for merchants to ask for your ID as a condition of processing a credit card transaction. Also some state laws even prohibit merchants from recording your personal information like address, social security number, Phone No. etc. (unless the address is needed for shipping, of course.)
According to VISA a merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID. They have specifically asked all their merchants, not to ask for ID as part of their regular card acceptance procedures.
So next time if the clerk asks for your ID and you don’t want to show your ID? Don’t.
4) Merchants Can Not Require You To Spend A Amount As Condition to Purchase
Imposing minimum or maximum purchase amounts in order to accept a Visa Card a serious violation of the Visa rules. A merchant can get banned for doing so. Same is the case with MasterCard. Master Card Agreement with Merchants clearly states that A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card.
5) Merchants Cannot Charge A Surcharge For Using A Credit Card
It is normally seen that some merchants do charge a credit card processing fee up to 3% on sale of their products. This is especially seen incase of high demand and “liquid” products with very thin margins. A few days back I was at a gas station that was charging a a different, higher price for credit cards.
Technically this is not allowed unless it is marked or disguised as “cash discount.” In other words, if you buy something and find out that you’ve been charged more than advertised because you paid with a credit card — that’s not allowed. If, however, you decide to pay with cash because you saw an advertised “cash discount” to the “regular price” — that’s ok. This is a very subtle distinction, but a very important one.
6) Many Credit Cards Have Programs That Will Automatically Double The Manufacturer’s Warranty
This is probably one of the best reason to use a credit card for shopping. I have seen friends who got their laptops replaced even out of warranty, Some even got their money back when an Online Shop sold them a box full of synthetic tiles instead of a DVD Drive. Check out the details of your card. It may come with extended warranty protection, 90 day accidental damage protection that includes vandalism, rental car insurance, road side assistance, baggage insurance, and return protection. You should be aware of the benefits your credit or debit card comes with.
These benefits really come in handy when you need them.
7) Your Right To A Chargeback Can Not Be Surrendered (Its Like Fundamental Rights)
Sometimes you see a receipt that has suspicious-looking fine print containing a waiver stating that you’re agreeing to give up your right to issue a Chargeback against the merchant for any reason, no matter what. These waivers means nothing. It’s all nonsense and it isn’t allowed by law and also discouraged by Credit Card Issuers.
Next time you see it, you should report the merchant to VISA or MasterCard.
Merchants Are Not Allowed To Place A Hold For The Estimated Tip
Merchants are not allowed to place an “authorization” for any estimated tip. For example, if you go to dinner and the bill is 100 dollar and you pay with a credit card, the restaurant might “authorize” your card for 115 (a 15% tip). Now If you choose to leave a 10% tip and then check your balance you will be amazed to see that you have been overcharged. This par see results in lots of angry customers, so the practice has been forbidden in nearly all merchant agreements.
9) If Merchants Suspect You Of Fraud They Call With A “Code 10″
According to Merchant Guidelines, If a merchant is suspicious of your credit card, they are supposed to make a “Code 10″ call. They have been asked to take your card, call the normal authorization number, and say “I have a Code 10 authorization request.” They will be asked a series of questions by the operator on the other side which can be discreetly answered with either yes or no. The merchant’s bank will then either authorize or deny the card.
In no case A merchant is supposed to threaten to call the police or try to detain you. MasterCard & VISA both says that if the police need to be involved, the “Code 10″ operator will call the police while the clerk waits on hold.
10) If Merchants Breaks Any of Above Rules, You Can Report Them To Your Credit Card Company
If the merchant breaks any of the rules we have stated above, it is your right and duty to report it to the credit card company for your own good and for the general welfare of credit card using community. Her is the MasterCard’s Merchant Violation form. VISA card violations should be reported to the financial institution that issued you your Visa card. Its very easy, the number is usually on the back of your card or on your VISA Credit Card Statement.
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Your first point is probably one of the most over looked security risks with credit cards.
First, merchants should always check and ID no matter what. They’re only hurting themselves if they don’t and they accept a bogus card.
I’ve used and unsigned card for years and years. Instead of signing it, I always put “Check Photo ID” in Sharpie. That way the merchant is supposed to ask for a photo ID. If they don’t and it happens to be stolen, the liability rests on the merchant.
Tyler @ Building Camelots last blog post..More Pink Paint And Some Great Nursery Ideas
@Tyler:
Thanks a lot for visiting the site and taking time to comment. I appreciate that.
I am not convinced that bogus cards can be prevented by checking photo ID or any ID. This is debatable issue.
Secondly, The liability of merchant ends if he has authorization from his bank and he has signature of customer on receipt.
R. MAK.s last blog post..10 Things You Should Know About Your Credit Card
Do you have any informations on Discover and American Express?
@ Richard Hertz:
I don’t have at the moment, but soon I will research and post about them as well.
R. MAK.s last blog post..10 Things You Should Know About Your Credit Card
Fraud crimes will get worse until banks make signature and PIN systems reliable as proposed on website http://www.xwave.co.uk
Why would anyone get tempted to do identity fraud when they know that their signature personalised with their ID sticker will expose their identity? Current signature system does not even expose person’s gender and so boosts identity fraud. Only this system will deter use of fake documents.
Why would anyone get tempted to use stolen or skimmed cards when they know that they will not be able to activate the transaction without new security code which will change to a new value after every transaction?
This system will also eliminate the need for us to protect our personal an card details since fraudsters will not be tempted to misuse these stolen details.
Organisations would make their customers personalise signatures by letting them use mobile phone size device which will capture image and activate printer to print their ID sticker virtually instantly.
Proposed system will deter virtually all fraud crimes including those Chip and PIN, data protection and even biometric ID cards will not deter.
This KEY and PIN system could be treated like international ID card since it will personalise signature and PIN to the right individual in any country in the world.
To protect the public and entire business industry from becoming victims of fraud government and banks should act now and exploit proposed system before it is too late to stop a fraud crunch which will be far worse than credit crunch.
good!!!!
eye opening facts about Credit Cards , really gr8 work !!
keep going ………..^
parass last blog post..Sony Ericsson Worst (Nagpur)
I thought I knew all there was to know about credit cards, but I learned some new things here. Great post, especially in today”s economy.
@Roger
Thanks for sharing this valuable information. would you like to do a guest post on this topic?
@Paras
Thanks for liking this post.. your post about SE’s bad practices is very impressive.. keep up the good work..
@Angela
I am glad you liked the post. Please keep visiting for more.. thanks for your comment
R. MAK.s last blog post..10 Things You Should Know About Your Credit Card
Man this is rich. A great job you have done here. Truly, ignorance is terribly EXPENSIVE. Thanks for sharing.
Nigerian Entrepreneurs last blog post..Can Your Family Business Outlive You?
@Nigerian Entrepreneur
Thanks for your appreciation. your encouragement keeps me motivated to research and write more…
R. MAK.s last blog post..A Quick Guide to Credit Card Basics
Good info, I never knew that a merchant wasn’t supposed to ask for ID if your card is signed. 90% of the time, I get asked for mine. It’s pretty much standard practice, I guess, even if they aren’t supposed to. What can you do about it? Not a darn thing. You can report them, sure, but what good does that do you. No ID, no sale. If I run in to buy something and refuse to show my ID, the merchant can refuse to sell to me. Also, all credit card agreements I’ve seen have stated that a card MUST be signed with a legal signature on the back and specifically say that a card is not valid if it says “see ID” instead.
cchiovittis last blog post..Happy September 23rd!
Have you ever tried to report an infraction? I am getting the run around about issue 4 and 5 right now. I went into a shop that had a minimum $10 purchase for cards or they would hit you with a $1 additional charge.
I tried to report this and not to spam your comments but look at what I am getting…
Greg,
Thank you for contacting Zions Bank with your concern.
Please know that the bank does not have control over when a merchant may charge a fee if the merchandise is under a certain limit. I do apologize for the inconvenience this causes you, but this is a merchant decision, not a bank decision.
Please let me know if you have further questions.
J****
You replied on September 22, 2008 at 3:26 PM as follows:
Hello J****,
Thank you for the note. I run several businesses and all of my accounts with VISA state that I am not allowed to charge more for using a card or have a minimum purchase.
From the VISA web site…
http://www.corporate.visa.com/ut/faq.jsp?src=home
“Can merchants set a minimum purchase or charge a fee for using my Visa card?
Visa has certain regulations that all merchants that accept Visa cards must follow. One of those rules is that Visa merchants are not permitted to establish minimum transaction amounts, even on sale items.
If you run into a problem like this with a merchant, please notify your Visa card-issuing bank. Visa member banks have access to the appropriate Visa rules and regulations as well as to the Notification of Customer Complaint forms which should be used by the bank to document and file merchant complaints. ”
This is becoming more and more common from buying gasoline to getting food as I am sure you have seen in your area as well. According to all my contracts and the VISA web site this is against VISA policy. This is why I reported the issue. If VISA is not going to enforce this policy then why do they even have it on the books? What else will they not enforce?
Thank you for taking the time to read my position. I will continue to report any such occurrences in the future until this price gouging stops and merchants are forced to follow the VISA guidelines as I do with my businesses.
Thank You,
Greg
Zions Bank responded on September 25, 2008 at 12:09 PM as follows:
Greg,
Thank you for your response.
I am sorry I was unclear in my original response. I have shared your concerns with our BankCard Management. Please know that Zions Bank does not have a way to know when merchants are violating their contract with Visa. Therefore, we do not interfere with these merchant decisions. Any violations from the merchant should be reported to Visa directly.
Again, I apologize for the frustration this causes you. I invite you to contact Visa with your concerns.
Thank you,
J****
You replied on September 25, 2008 at 12:32 PM as follows:
Hello J****,
Thank you for the response. You do not have a way to know when merchants are violating their contract with Visa? That is why I am reporting it to you. Visa says we should report it to you and that you have the proper forms to report this directly. I stated this in my last response and even quoted the Visa page that says this.
If you can give me a way to report this to Visa I will be happy to leave you be and start notifying them but according to their web site they state that I am to report it to you. Here is what their web site says again since it seems you missed it in my last response.
Visa says……….
“If you run into a problem like this with a merchant, please notify your Visa card-issuing bank. Visa member banks have access to the appropriate Visa rules and regulations as well as to the Notification of Customer Complaint forms which should be used by the bank to document and file merchant complaints.”
So, do you see my problem? You say report it to them and they say report it to you. It sure sounds like nobody knows who the responsible party is supposed to be and yet I am still being overcharged by merchants breaking the Visa guidelines. I guess most people roll over at this point but I am refusing until my concerns are fully addressed.
I know this is not your fault J****, so please do not take it personally. I am just trying to find a way to report this issue where something will actually be done.
Greg,
Anyone have a better way of reporting this?
Greg Hancocks last blog post..Anyone Catch Letterman?
something my old economics teacher used to say (and relevant now more than ever before).
Remember, whenever you see the word “credit”, just replace it with the word “debt” and see if the meaning is still the same..
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