Payment: How Are You Paying For Them?
Safest Way to PayWhy is paying by credit card safer than paying by check, cash, debit card, money order, cashier's check, certified check, teller's check, or cash on delivery (C.O.D.).?
If you have an unauthorized charge on your credit card, under federal law your liability is limited to $50. Moreover, some web site operators and credit card issuers (including all VISA and MasterCard issuers) promise that under certain circumstances they will even pay this amount for you.
Can paying by credit card help in a dispute?
Federal law provides several rights for consumers who dispute charges for goods or services under two rules. For additional information about consumer rights and responsibilities with credit card use, see the ABA website on SafeBorrowing.
The "billing error" rule applies if you have authorized the merchant to charge your account (either a credit card account or the merchant's revolving charge account) and
- there is a mistake in the bill that you receive or
- the goods or services were not delivered or were late, or
- they did not comply with the contract and you did not accept them. (This rule does not apply if you are disputing the quality of goods or services that you have accepted. You may, however, have rights under another rule.)
Under the second rule, ("claims and defenses"), you may dispute the seller's charges if the goods do not arrive or, even if you accepted them, you have a good legal claim against the seller because the goods do not comply with the contract or the seller does not honor its return policy. There are several limitations to keep in mind that do not apply under other rules:
- You may only dispute charges you have not yet paid and
- You must have made a good faith attempt to resolve the dispute with the seller.
What are other reasons to pay by credit card?
You may save money by using a credit card if you pay it off in full when the bill arrives. If you do this instead of paying the seller immediately, you will have the money in your bank account, earning interest, until your credit card bill for those payments comes due. Remember that if you pay only the required minimum amount and leave the balance unpaid, you will have to pay interest (which will be called "finance charge" on your bill). And if you keep paying only the minimum amount each month, you will be paying a lot of interest over many years.
Some credit card issuers grant you extended warranties or other advantages for purchases made with the card.
You have greater legal protection against your seller if the goods are defective and, in some cases, if your credit card number is used without your authorization. However, both MasterCard and VISA now promise $zero liability for some unauthorized use of debit cards on the Internet. Other card issuers may offer the same protection.
Identity theft occurs when someone uses your personal information like your name, Social Security number, or credit card number to commit fraud. The most common way in which thieves obtain such information is by theft of your purse or wallet. Identity thieves also try to trick you into giving them that information by using highly sophisticated emails which appear to come from banks, insurance companies, internet service providers, auction sites, and other kinds of websites. These emails, which may even look like real emails of the company or its actual website, ask for your personal information in order to "verify" accounts or "clear up" errors that have occurred.
Legitimate businesses do not ask for social security numbers or bank account numbers on the Internet. Do not respond to such emails and do not click on any links they contain. If you wish to check with the company, type the address of the website into your own computer or telephone your question.
Identity thieves may use your information to open a new credit card account or to get a loan in your name. When they don't pay the bills, the delinquent account is reported on your credit report. The law gives you specific rights when you believe you are the victim of identity theft, including the right to have nationwide credit reporting agencies place a fraud alert notice in your file, the right to receive two free file disclosures per year, and the right to obtain documents relating to the fraudulent transactions. You can also block credit reporting and collection activity for fraudulent transactions that result from Identity Theft.
If you believe someone has used your personal identifying information to obtain credit in your name, you should (a) file a police report about the events, (b) contact the creditor to request more information and copies of documents about the fraudulent transaction, enclosing a copy of the police report, and (c) send the national Consumer Reporting Agencies a copy of the police report and request that they block all reporting about the transaction. The creditor and the national Consumer Reporting Agencies have a very limited time to respond to your requests (generally 15 days after you send them a police report of identity theft) and may ask for only limited supporting documents before blocking the item. For example, you may be asked to sign a statement under oath (an "affidavit") explaining what happened.
For further information on identity theft problems and victim assistance, see http://www.ftc.gov/bcp/edu/microsites/idtheft/. This Federal Trade Commission website contains important information about identify theft and provides guidance on what to do if you suspect you have been an identity theft victim. You will also find helpful information on the website of the attorney general in your state.
Be careful not to give away personal information to people who commit fraud by email.
- Never provide personal or financial information to unsolicited email or pop-up requests no matter how "legitimate" they look.
- Type web addresses into your web browser instead of clicking on links in emails.
- Change your passwords every 60 to 90 days.
- Get anti-virus and anti-spam filtering software and keep it up to date by using its automatic update feature (if your service provider or employer does not provide it for you).
- Keep track of your accounts. Consider getting credit reports at least on an annual basis to make sure someone is not using your identity. You can do this for free at www.annualcreditreport.com.
Credit Card Account ProtectionHow can you protect against unauthorized use of your credit card account number?
Carefully and promptly check your credit card statements when they arrive. If you identify any irregularities, you should immediately bring these to the attention of the issuer of the credit card by telephone and in writing.
Do you need a separate credit card?
Consider getting a credit card to use just for online purchases. It will be easier for you to review your records. Also, you'll still be able to use your other credit cards if the security of your online card is in doubt.
Some credit card issuers offer "virtual" credit cards for online transactions. You go to the issuer's website and follow the instructions for obtaining the number you may use in your next transaction. Even though the virtual number you give to the merchant is not the same as the one on your credit card, the charge will be authorized, and it will appear on your regular credit card bill. So, if there is a breach of security by one merchant, the person who obtains the number will not be able to use it to charge things to your account.