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How does the credit card refund process work?

Learning how the credit card refund process works is very important because one of the most beneficial and little-known aspects of a carefully selected credit card comes in the form of purchase protection.

One element of this feature, which is held to the minimum standards of the Fair Credit Billing Act (FCBA) and is often enhanced with different levels of convenience by individual credit card companies, allows consumers to get a refund through the credit card issuer for transactions-gone-bad in the marketplace.

Examples of refundable circumstances include: unauthorized charges, items or services not delivered as promised, items damaged upon delivery, contracted services not performed or not finished, and charges in the wrong amount. Issues related to the quality of a sale or service should be addressed not through a billing dispute, as is discussed here, but by stopping payment, which is a separate topic from the credit card refunds discussed in this article.

When am I entitled to a credit card refund?

The actual provisions of the FCBA stipulate that a sale must ring up for more than $50 and must take place in the home state of the consumer or within 100 miles of the consumer’s address to qualify for credit card protection. However, due to the credit card companies’ commitment to keeping customers, most issuers will go above and beyond in protecting consumers. While the FCBA’s stipulation seems to release credit card issuers from the protection of purchases made in one very large sector of the marketplace—mail orders and the Internet—it is likely that the credit card company will go to bat for consumers anyway in order to hold onto good customers and its good reputation.

How do I get a credit card refund?

Before you dispute a charge with your credit card company, you should exhaust all options at the point of sale. If the salesperson won’t give you the refund, ask to speak with a manager. Keep your own record of each conversation and send a written report of the dispute to the merchant. If you do not get the response you are hoping for, you can send a copy of that same written report to your credit card company when you dispute the claim. Add any information relevant to your credit card issuer, such as your account number and the exact amount of the item or service. You must file a claim with your credit card company within 60 days of the disputed purchase. Be sure to direct any correspondence to the billing inquiry department, not the address to which you send your monthly payment. Directing all communications directly to the source will help you resolve the dispute faster.

A credit card issuer must investigate and respond to you in writing within two billing cycles, or 90 days. When you consider the factors that contribute to a dispute timeline, you will see how it can become a lengthy process. By law, the credit card companies are allotted 30 days to place the claim in dispute. The merchant’s bank then has 45 days to respond with proof of the charge’s legitimacy. The credit card company must then notify you in writing. Different issuers approach these matters with varying levels of efficiency and efficacy, so look closely at the each card’s terms and conditions in regard to disputes when comparing credit cards.

It is important to know that a credit card company cannot charge you interest on a charge while it is under investigation. However, be sure to keep current with all your payments, as the rest of your charges will not be affected. If the dispute is settled in your favor, you will not be liable for the finance charges for that item or service. If it is not settled in your favor, you will be sent a letter explaining the decision and the amount you owe. This amount will include any finance charges that accrued while the payment was in dispute.

Finding the credit card that will best protect you

If protecting your purchases is a high priority, you should compare credit cards with that in mind. Consider factors such as the length of time a dispute should be expected to take. Look at the terms of each credit card to find out the duration of the process, from initial investigation to the crediting of your account upon the successful resolution of the complaint. There are other consumer protections you can look into as well, such as “zero liability” provisions, which guarantee you will not have to pay anything in the event of fraudulent activity on your account. Compare credit cards now!

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Disclaimer: This content is not provided or commissioned by American Express, Visa, MasterCard, Discover, or any other credit card company or issuer. The opinions expressed here are the author's alone, not those of any credit card company or issuer, and have not been reviewed, approved or otherwise endorsed by any credit card company or issuer. Credit Card Chaser may be compensated through various affiliate programs with advertisers. As always, Credit Card Chaser is an independent website commmitted to helping people research credit card offers and find the best credit card!

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