9 Tips for Handling Credit Card Disputes

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An incorrect charge on your credit card bill can be nerve-racking, whether it’s a simple merchant billing error or a case of fraud.

That’s why you should always check your monthly billing statement to make sure it’s accurate. What do you do when you see a charge you don’t recognize?

Inaccuracies can occur for a number of reasons. Maybe the merchant overcharged you. Perhaps you bought something you never received. Or perhaps your credit card number was stolen. (Data breaches, like the one at Equifax a few years ago, remind us that no matter how prudent we may be in safeguarding our personal information, our identities can still be stolen.)

Here are a few tips for handling credit card disputes:

Tips for Disputing Charges on Your Credit Card

1. Take a Deep Breath and Know Your Rights

It can be easy to panic, but take a deep breath because there are a number of federal laws that protect consumers.

For instance, federal law provides up to 60 days for you to dispute a charge, so you have plenty of time to act, even if you don’t recognize the error immediately.

Federal law also limits your maximum liability up to $50 for unauthorized charges. In some cases, this amount could be less because many banks offer a zero-liability fraud guarantee as a perk of card membership, and do not require you to pay disputed charges until they complete an investigation.

2. Try to Resolve the Issue With the Merchant

If you were charged incorrectly, contact the merchant directly to try to resolve the issue. It will help if you have documentation.

If you bought something online and never received it, the merchant may be willing to send you another shipment – no questions asked. Companies, which value customer service, understand that sometimes packages get lost or stolen. It’s a small cost of doing business.

 3. Get Everything in Writing

Keep any correspondence with a merchant regarding a disputed charge because you might need to present it as evidence to your bank.

Written communications, such as policies or promises the merchant made to you, are easier to present as evidence and will carry much more weight if you have to explain the situation to your bank. (Although many phone conversations to merchants are recorded, they’re a hassle to try and use as proof.)

4. Report Your Card as Stolen

If you suspect your card was stolen and used fraudulently, notify your bank immediately. The bank will monitor the account for further charges and typically issues a new credit card. You can request to have the new card sent to you overnight. Depending on the bank, this service may be free of charge.

5. Follow Your Bank’s Dispute Process for Each Charge You Don’t Recognize

It’s important for you to go through your billing statements and dispute each unrecognized charge.

It’s better to be safe than sorry. If you’re dealing with a number of disputed charges and you’re not sure if a charge is legitimate or not, you can dispute it anyway. In other words, there’s no penalty for accidentally disputing a charge you made yourself.

Many credit card companies request supporting documentation from the merchant for each disputed transaction, and if they don’t decide in your favor, they may provide you with a copy of what the merchant received (e.g., receipts showing details of the purchase). At this point, you can determine if it was a charge you made and just accidentally disputed. 

6. Confirm How the Bank Treats Disputed Charges

Generally speaking, you won’t be responsible for paying any charges you dispute and the bank will issue a temporary credit for the charges under dispute.

Some banks may reduce your credit limit by the amount of the disputed charges. So, even though you don’t have to pay for those charges until the bank completes its investigation, your purchasing power may be temporarily reduced.

7. Take Additional Steps Even if the Bank Doesn’t Initially Decide in Your Favor

The review process for disputes can involve human error, so if the bank doesn’t agree with your initial dispute, you still have options.

Citibank, for instance, allows you to appeal a decision by emailing, faxing or mailing a form detailing the reasons why you believe their decision was in error.

8. Lock or Freeze Your Card

When it comes to identity theft, there are a few things you can do to reduce the likelihood of fraudulent charges.

Some banks, like Discover and Citi, allow you to lock or freeze your credit card by using your mobile app. By turning this feature on, you’re telling the credit card company not to authorize any new transactions on your card.

You can use this feature if you’ve lost or temporarily misplaced your card. It can also be a useful feature if you have a card you don’t use very frequently.

9.  Enable Mobile Notifications

Many banks offer options for notifying you whenever your card is used. Although it won’t prevent your card from being used, these notifications will allow you to act quickly if your card is used without your permission.

For instance, depending on the bank, you can elect to be notified via email, phone call or text message whenever your card is used, and you can choose to be alerted only when charges exceed a dollar amount, or are used at a gas station or overseas.