Using Credit Cards: What you need to Know

Using credit cards wisely can help you avoid a credit calamity.

What you need to Know

Whether you’re using your credit card to buy a laptop or a box of laundry soap, you have rights and responsibilities under the law.

  • Payments – Pay promptly. If you don’t, your credit card issuer may charge you late fees and additional finance charges.
  • Errors on Your Bill – Card issuers must follow rules for correcting billing errors promptly. They are required to send you a statement outlining the rules when you open an account, and at least once a year while your account is open. A summary of these rights is often included on your billing statement.If you find a mistake on your bill, you can dispute the charge and withhold payment on that amount while the charge is being investigated. You still have to pay any part of the bill that’s not in dispute, including finance and other charges.
  • Unauthorized Charges – If your credit card is lost or stolen, report it to the card issuer as soon as possible. Some issuers have 24-hour toll-free telephone numbers to accept emergency information. If you report the loss before the card is used, you can’t be held responsible for any unauthorized charges. If a thief uses your card before you report it missing, the most you’ll owe for unauthorized charges is $50. If the thief uses your card number, not your card, you have no liability for the unauthorized charges.
  • Disputes about Merchandise or Services – You generally can dispute charges for goods or services you find unsatisfactory if you’ve made a good faith effort to resolve the dispute with the seller, the charge is for more than $50, and you made the purchase in your home state or within 100 miles of your current billing address.
  • Refunds of Credit Balances – If you have a credit balance on your account, perhaps because of a return, you can keep the credit on your account or write your issuer for a refund if it’s more than a dollar. Your card issuer must send you a refund within seven business days of receiving your request. If you don’t ask for a refund and you don’t make any other purchases for more than six months, the issuer must make a good faith effort to send you a refund.