About Disputing Credit Card Charges

Credit cards are a major modern-day convenience--many people charge everything they buy, from a pack of gum to a houseful of new furniture. However, credit cards are more than just an easy way to avoid carrying cash.
Credit card companies provide their customers with protection against shoddy merchandise by allowing customers to dispute charges for goods that were poorly made or never received.

Function

Disputing credit card charges allows consumers some protection against retailers that don't provide quality merchandise. If you pay for a purchase in cash, the retailer is fully in control--they can keep your money whether you are satisfied with your purchase or not.
By paying with a credit card, you engage your credit card company on your behalf, and if you are not happy with your purchase, the credit card company can withhold payment from the retailer until they make the situation right.

Types

Nearly all credit card companies offer some type of dispute process as an automatic benefit of being a cardholder. However, you must read the fine print on your agreement to determine how your credit card company handles disputes.
Some companies automatically refund your money until the dispute is settled, but if the dispute is not settled in your favor, you may have to pay interest on the refunded amount. Other companies refund your money only when the dispute is finalized.

Features

Disputing a credit card charge is not complicated. The cardholder is required to contact the retailer directly first, to see if the issue can be resolved without intervention from the credit card company.
If the retailer and cardholder cannot come to an agreement, the cardholder simply writes a letter to the credit card company stating the reasons behind the dispute, along with a copy of their statement showing the amount in dispute and the date of the charge.
The credit card company then contacts the retailer for further information. If necessary, the credit card company will contact both cardholder and retailer again for supporting evidence or documentation.
Once all of the pertinent documentation has been submitted, the credit card company will decide whether to pay the retailer or refund the cardholder. If the cardholder wins the dispute, it is the retailer's responsibility to recover the merchandise in question.

Misconceptions

Many cardholders believe that credit card disputes will automatically turn out in their favor. This could not be further from the truth. Credit card companies have very strict policies in place to make sure that both parties in a dispute are treated fairly.

Benefits

Having a credit card company dispute a charge for you is an extremely effective way of dealing with an unresponsive merchant. If the retailer does not respond to the credit card company, they automatically forfeit the dispute, so even the most difficult of retailers generally pay attention when a credit card company gets involved. Disputing a credit card charge is often a consumer's only means of getting what they paid for.

Resources

• Credit Card Disputes at Bankrate.com