Your Money_ The Missing Manual - J. D. Roth [77]
Pay your bill on time and in full every month. This is the #1 way to keep credit cards under control. The Credit CARD Act of 2009 says card issuers have to send bills at least 21 days before the due date. This gives you plenty of time to send a check. But it's best to take care of business as soon as possible, so set up automatic payments or pay your bills as they arrive. (And remember that you're responsible for paying your bill every month, even if you never receive the statement.)
Set up "expense notifications" from your credit card's website. Many card issuers offer free tools that tip you off to how your card is being used. For instance, you may be able to set things up so you get an email anytime your card is charged more than $50 or $100. This can help you spot a stolen card quickly.
If you're not yet in credit card debt, don't start. Credit cards are not a source of free money—quite the opposite in fact: they can end up being the source of super-high-interest loans—so don't rely on them to support a lifestyle you can't afford. Remember: Don't resort to using a credit card just because you can't pay cash for something—use a card because you can pay cash.
Your Money And Your Life: Credit Where It's Due
Jim Wang, who writes about money at www.bargaineering.com, is a great example of someone who has his credit cards under control, instead of letting them control him.
Wang loves credit cards. "I use credit cards for the cash-back rewards," he says. He has some cards that give 5% cash back on certain purchases. "Credit cards also make things easier from a money-management perspective. All my spending records are in one place."
He has a wallet full of credit cards. "I have eight or nine cards, but I only have two that I really use," he explains. "The others are just cards I keep open for credit score reasons or for special cases." (Flip to Your Credit Score for info on credit scores.)
Wang says the key to profiting from credit cards is to pay your balance every month. He's been using credit cards for 11 years and has never paid a finance charge. He's never paid a late fee, either, though he's come close. "There have been times my payments were a couple days late, but every time I've been able to call and have them remove the late fee and the finance charges. Everything's been fine."
For more on savvy use of credit cards, pick up a copy of How You Can Profit from Credit Cards (FT Press, 2008) by Curtis Arnold.
Disputing Charges
Mistakes happen. Once in a while, a restaurant will charge you twice for the same meal or an online bookstore will bill you for somebody else's purchase. When you notice something goofy on your credit card statement, it's important to act quickly to correct the problem. Here's how:
Get it in writing. To make things easier in case you have problems, always save receipts and warranties, and ask for written confirmation of promises like delivery dates.
Start at the source. First, try to solve the problem by contacting the merchant that charged the card. Explain why you think the charge is wrong and ask them to reverse it. If that doesn't work, go to the next step.
File a dispute with your card issuer. As soon as possible, send a written complaint to the issuer's "billing inquiries" address (not the address where you send your payments). Include info about your account, an explanation of the problem, and copies of any receipts. The FTC has a detailed description of this process at http://tinyurl.com/ftc-fcba. (Many card issuers have online dispute-resolution forms, which may be more convenient than filing a dispute by mail.)
Take your complaint elsewhere. If you're unhappy with how things turn out, contact agencies like your state's