Credit Cards: Consumer Rights Regarding Credit Cards
Credit cards are regulated by both state and federal laws. As a consumer, you have both rights and obligations in your dealings with credit card companies. The following is a summary of your rights and obligations.
A credit card company must credit your account the same day it receives your payment. If a credit card issuer does not do this, it is barred from charging your account additional finance charges as though it had not received your payment yet. Several credit card companies have been caught violating this rule to collect even more money, and have been sued by regulating authorities and forced to give customer refunds. (Credit card companies are routinely audited to make sure their billing practices are proper.)
A credit card company must correct errors on your bill within a specified period. Under federal law, you are required to notify a credit card issuer in writing within 60 days of the billing error occurrence. Phoning them does NOT protect your legal rights. To protect yourself legally, it is a good idea to send this correspondence certified mail. In turn, the credit card issuer is required to remedy the error within two billing cycles or within 90 days of receiving your written notification. If it does not correct the billing error in a timely fashion, the consumer has legal remedies, but these are insignificant and do not really punish the credit card company. Click here for more information.
A credit card company cannot hold you liable for fraudulent charges. Actually, under federal law, you can be held liable for $50 of unauthorized charges; however, most credit card companies waive their right to collect this. In fact, a current trend is for credit card companies to offer zero liability for unauthorized charges as a marketing tool -- they urge you to apply for their card because they won't hold you responsible for fraudulent charges, but this has always been the case. Of course, you have a duty to report any unauthorized charges and the loss or theft of your credit card to both the police and the credit card company as soon as possible.
You can reject changes in your card agreement. A credit card company is required to provide you with written notice when it changes any term in your card agreement. Read these changes carefully as they might negatively impact you, particularly when they change the way your interest is computed (which is usually a sneaky way to get more money out of you). You can reject these offers by following the instructions provided along with the notice. These usually appear under a section entitled, "Non-acceptance Instructions" which usually read as follows: "If you do not wish to accept these changes, you must notify us in writing within ___ days [or by a specific date] of your non-acceptance. Include your name, address and account number and mail to: [address]. If you notify us that you do not accept these changes you can continue to use your card under your existing terms until the end of your current membership year or the expiration date on your card, whichever is later. At that time your account will be closed and you will be able to pay off your remaining balance under your current terms.