Knowing your credit card rights

The Fair Credit Billing Act protects you from both honest errors and outright fraud by merchants when you buy something using a creditor travel and entertainment (charge) card. You don't receive as much protection, though, when using debit cards, such as an ATM card, that take money directly from your bank account.

Three of the most important safeguards are against:

Billing errors
If you find what you think is an error on your statement, you can withhold payment on the amount (or ask for a credit if you've already paid) while the card issuer investigates the problem. You must notify the customer service department (not the department where you send your bills) in writing within 6o days of the billing date (also called the closing date). A phone call won't protect your rights. The billing date appears on the front of each statement.
Once notified, the card issuer has up to 30 days to respond to you and up to 90 days to resolve the problem. If there's no resolution within 90 days, you can deduct $50 from the amount even if you lose the dispute. Include any evidence, such as receipts, that support your claim.

Defects or disputes
By law, every product must work properly if used for its intended purpose. When you use a card, you get "buyer protection" help against charges that are:
• above the agreed-upon price
• for items ordered but never sent
• for merchandise you didn't order
• for things that don't work as they're supposed to
• for unsatisfactory services

First, you must try to resolve the issue directly with the seller. If that doesn't work, you can refuse to pay the bill and ask the card issuer to step in. The card issuer must try to resolve the problem within 90 days. If it takes longer, you may not be liable for the charge at all.

Buyer protection applies to purchases over $50 made in your home state or within too miles of your mailing address. (If the card issuer is connected to the product, there are no restrictions.)

Unauthorized use of the card
Once you report a card lost or stolen, you're not liable for an purchases or cash advances made without your consent. In any event, as long as you report the card missing within a reasonable time (e.g., 30 days), you're only liable for up to $50. The phone number to call to report a lost or stolen card is on the hack of every statement.

Many card issuers offer a lost or stolen card protection service for a fee (typically between $1 and $45 a year). When considering whether this service is worth the fee, keep in mind your liability is limited by law to $50 anyway, as long as you call your card issuer quickly.

The effect of disputes on your credit
During a dispute, the card issuer isn't permitted to report the amount to a credit bureau as a delinquent payment, and no collection agency can come after you. The issuer can continue to tally interest charges against the amount (in case you end up owing it), and they can apply the amount to your credit limit.
If the situation isn't settled to your satisfaction, you can notify the issuer in writing within 10 days. That will give you extra protection, because if they report it as a non payment, they'll be required to report your side of the story as well.

Notes:
No to annual fee. Card issuers are legally required to show the annual fee on the statement in the period before it's due, so you can decide whether you want to pay it. If you decide not to pay) you're asked to cut up the card and return it. You can still use the card until the end of the billing period. The issuer will continue to bill you monthly until you repay what you owe.

Card blocks. Some hotels put a "block" on your credit card for an amount they estimate you'll spend during your stay. Some car rental companies do the same,) Then they sometimes don't release the funds until weeks later, if you don't discover the block, you could be at a store and have your credit refused because you're at your credit limit. You have the right, however, to insist that a block be lifted when you check out of a hotel or return a car

ATM cards are different. You have 60 days from the date on your statement to report a billing error. Here's the law for reporting lost or stolen cards: If you notify the bank within 2 business days, you're liable for up to $50. If you notify them within 60 days, you're liable for up to $500. After that, your liability is unlimited until you report the card stolen.