5 Rules Everyone Should Know about Credit Cards
1) A credit card does not become valid till it is signed
The back of every credit card has a section for a signature. Usually it is a small strip that you can write on. Next to the strip there is a small notation that says “not valid until signed”. This is where you want to sign your credit card. The card is not considered valid until this section is signed.
There are steps that a merchant should take when he or she is presented unsigned card:
a. The merchant should first ask for the customer’s identification. Adriver’s license is ideal. A signed passport will work should the customer not have a driver’s license.
b. Then, the merchant should ask the customer to sign the card and compare the signature to the signature on the driver’s license or passport. Should the signatures match, then card is good. If the signatures do not match, then the merchant needs to call the card issuer and report possible fraud.
c. If the customer refuses to sign the card, then the merchant should not accept the credit card.
2) Liability for the unauthorized use of a credit card can not surpass $50.
The Fair Credit Billing act was established to protect consumers against fraud and billing errors. In order to initiate a dispute, a cardholder should write the credit card issuer within sixty days of receiving your credit card statement. Furthermore, this letter needs to be sent via US mail. However, the cardholder is only responsible up to $50 should the unauthorized use not be reported within the sixty days.
3) A minimum purchase can not be required by a merchant as a condition to use your credit card.
Have you ever been to a convenience store to purchase a soda and chips with your credit or debit card only to find out that the store owner is requiring you to charge a minimum of $5? This practice is against the user agreement that the merchant signs when they are given a credit card processing account. The only thing the merchant can do to offset fees incurred by accepting credit cards is to increase prices. They can include a cost factor in the price of the soda and chips, but they may not require customers to make minimum purchases or charge a surcharge for using your card. In today’s direct deposit society more and more people carry debit or credit cards as opposed to cash.
4) Do not buy extended warranties on purchases if your credit card already has a purchase warranty program.
How many times have you gone to Best Buy or Radioshack and been asked to purchase an extended warranty on what you just bought? For those of you paying on your credit card chances are, your credit card issuer already comes with a buyer protection program. This is one of the advantages to using a credit card to make purchases as opposed to cash. Be sure you know the features that your credit card has to offer. In addition to purchase protection, many credit cards even give you rental car insurance or even road side assistance.
5) Merchants are not allowed to pre authorize your credit card to include a tip.
An example is when you go out to dinner and pay your meal on a credit card. You are fist given the bill, and then you give the waiter or waitress your credit card. This person must authorize your card for the amount of the meal only. They may authorize the tip without your say so. You (the cardholder) then decide how much tip to give once the individual brings back your credit card and receipt. Should you choose to give a tip, then the restaurant is allowed to charge your card.
1) A credit card does not become valid till it is signed
The back of every credit card has a section for a signature. Usually it is a small strip that you can write on. Next to the strip there is a small notation that says “not valid until signed”. This is where you want to sign your credit card. The card is not considered valid until this section is signed.
There are steps that a merchant should take when he or she is presented unsigned card:
a. The merchant should first ask for the customer’s identification. Adriver’s license is ideal. A signed passport will work should the customer not have a driver’s license.
b. Then, the merchant should ask the customer to sign the card and compare the signature to the signature on the driver’s license or passport. Should the signatures match, then card is good. If the signatures do not match, then the merchant needs to call the card issuer and report possible fraud.
c. If the customer refuses to sign the card, then the merchant should not accept the credit card.
2) Liability for the unauthorized use of a credit card can not surpass $50.
The Fair Credit Billing act was established to protect consumers against fraud and billing errors. In order to initiate a dispute, a cardholder should write the credit card issuer within sixty days of receiving your credit card statement. Furthermore, this letter needs to be sent via US mail. However, the cardholder is only responsible up to $50 should the unauthorized use not be reported within the sixty days.
3) A minimum purchase can not be required by a merchant as a condition to use your credit card.
Have you ever been to a convenience store to purchase a soda and chips with your credit or debit card only to find out that the store owner is requiring you to charge a minimum of $5? This practice is against the user agreement that the merchant signs when they are given a credit card processing account. The only thing the merchant can do to offset fees incurred by accepting credit cards is to increase prices. They can include a cost factor in the price of the soda and chips, but they may not require customers to make minimum purchases or charge a surcharge for using your card. In today’s direct deposit society more and more people carry debit or credit cards as opposed to cash.
4) Do not buy extended warranties on purchases if your credit card already has a purchase warranty program.
How many times have you gone to Best Buy or Radioshack and been asked to purchase an extended warranty on what you just bought? For those of you paying on your credit card chances are, your credit card issuer already comes with a buyer protection program. This is one of the advantages to using a credit card to make purchases as opposed to cash. Be sure you know the features that your credit card has to offer. In addition to purchase protection, many credit cards even give you rental car insurance or even road side assistance.
5) Merchants are not allowed to pre authorize your credit card to include a tip.
An example is when you go out to dinner and pay your meal on a credit card. You are fist given the bill, and then you give the waiter or waitress your credit card. This person must authorize your card for the amount of the meal only. They may authorize the tip without your say so. You (the cardholder) then decide how much tip to give once the individual brings back your credit card and receipt. Should you choose to give a tip, then the restaurant is allowed to charge your card.
Labels: credit card, credit cards, Fair Credit Billing Act
Credit Card / Financial news blog post by Todd Holliday at 5:58 PM 