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What You May Not Know about Your Credit Card

What You May Not Know about Your Credit Card

So you’ve been using credit cards for years now, and you feel pretty confident in your knowledge of them. You’ve read all the fine print on your consumer agreement, and you’ve had enough interaction with creditors to know how to handle them. Although you may be a financing veteran, you’d be surprised at what you don’t know about financing. Here are ten things you may not know about your credit card.

  1. Cards without signatures are invalid. If it is not signed, a merchant can refuse to accept it as a form of payment. According to Visa, what a merchant should do when presented with an unsigned card is ask for a government-issued ID, then request that you sign it.
  2. Federal law limits your liability for unauthorized use to $50. The Fair Credit Billing Act prevents you from being liable for more than this amount if it is used without your permission. Keep in mind that this is different for debit cards, where your liability depends on how quickly you report the fraud.
  3. The law prohibits merchants from requiring you to show ID, unless your card is unsigned. Most states have laws that makes this practice illegal.
  4. A merchant cannot mandate a minimum purchase amount. It is actually a violation of the agreement the merchant has with the issuing company to require a minimum transaction amount.
  5. A merchant cannot assess a surcharge for use of a credit card. You cannot be charged for using your card, but merchants are allow to offer discounts if you pay in cash.
  6. Most credit cards have programs that extend the manufacturer’s warranty. When you pay for a purchase with a credit card, you may be entitled to certain protections if you encounter any problems with the item.
  7. Merchants are not permitted to have you forfeit your right to a chargeback. If you see a waiver like this on your receipt, report the merchant.
  8. No holds can be placed on your account for estimated tips. A restaurant cannot authorize funds for more than your purchase based on an estimated tip.
  9. If you are suspected of fraud, the merchant should call the creditor with a “code 10.” They cannot threaten to detain you or call the police.
  10. Any violations of these rules can be reported to the issuing company. You may have to contact the credit card sponsor, such as MasterCard, directly or contact the bank that issued it.

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