Credit Cards Online Information

You bring a touch of safety to your financial life when you shop with a credit card. If the goods are defective, and the merchant balks at taking them back, you can ask the credit-card issuer to rescind the charge.

But the issuers can't rescue you every time. Only certain types of transactions are covered.

Several readers recently complained to me that their banks had refused to reverse an unjust charge. As it turned out, the banks were following the rules. For your own protection, you need to know when you're covered and when you aren't.

The first thing you need to think about is the card you use. You're protected, by law, if your charge card was issued by the same store where you bought the disputed goods.

The rules change, however, if you shopped in person, using a bank card like Visa or MasterCard, or a travel-and-entertainment card like American Express.

With them, you're protected only if the item cost more than $50 and was bought in your home state or, if not, then within 100 miles of your mailing address. (Some card issuers stretch this role.)

You might also be protected if you used a credit card to buy by phone, mail or Internet, from a company that advertises in your state or sent material (such as a catalog) to you there. Whether these transactions occur in-state depend on state law, but they normally do.

You have to make a good-faith effort to resolve your problem with the merchant, unless the merchant is out of business. That means reporting the problem, immediately and in writing, and asking for a refund or other fix. Keep copies of your correspondence, as well as written notes of your telephone conversations.

The dispute must be over a consumer purchase. The law doesn't cover items used in business, including home businesses. If you're suckered into using your card to buy an overhyped "business opportunity," you'll be stuck with the bill unless a consumer-protection agency steps in.

You have to have paid with a credit card, not with a cash advance on your credit line. The "ready checks" or "cash checks," mailed to consumers by many banks, are treated as a cash advance. If you use them to buy goods that turn out to be less than advertised, the bank won't get you your money back.

The law also helps you only if you haven't paid for the item in full. The card issuer can erase an outstanding bill but won't recover money you've already paid.

In most cases, the merchant will settle the problem. If not, and if your transaction qualifies under all these rules, write to the card issuer.

Explain your case factually. Don't moan and groan all over the page. Attach evidence that you tried and failed to resolve the dispute. Ask the issuer to rescind - or "charge back" - the transaction under Regulation Z, as applied to the Truth in Lending Act.

The law requires the card issuer to investigate your complaint. During that time, the issuer cannot close your account or report you as delinquent - although it can note on your credit report that the payment is in dispute.

You're allowed to withhold payment only on that one transaction. Keep making payments on anything else charged to the card.

There's no time limit on asking for a charge back. But as a practical matter, you'll want to take care of it right - away before your nonpayment gets reported to a credit bureau.

If the card issuer believes you're right, it will charge the disputed payment back to the merchant's bank. The unpaid amount, plus any finance charges, will be taken off your bill.

On the other hand, the issuer may blame you for the problem - especially if the issuer is the very store you're arguing with. A bank might judge the dispute with a more disinterested eye.

If you're found to owe the money, and refuse to pay, the card issuer may report you as delinquent and blacken your credit standing. You can add your side of the story to your credit report, but that won't cut a lot of ice with other lenders you apply to.

You're generally not sued, unless the debt is large. More likely, your unpaid bill will be sold to a collection agency that will dun you for awhile.

Fortunately, few disputed cases ever get this far. Banks will usually rescind an unjust charge, as long as you're covered by the law.

New wrinkles in insurance

The next time you buy term insurance, you might not sit down with a life insurance agent. That's a costly way of selling, especially for term (term policies are cheap to buy, pay off when you die and have no internal investment values). The commissions are so puny they're rarely worth an agent's power of persuasion.

A new distribution system is developing, with different players and new ways of marketing. Banks and stock brokerage houses are selling by telephone, mail or Internet. Licensed agents still take your order, but they're voices at the end of a phone.

Term coverage, by contrast, will be mass-marketed to middle-income families. You'll have to take the initiative to buy coverage yourself. The new competition, however, should help you get a better deal. Price-quote services are proliferating. They search a term-policy database to find the best price for someone of your age and health.

# posted by Medical Information : 3:41 AM