I've written a lot about the financial evils of using credit cards to inflate your lifestyle, but truth be told there are some advantages to charging purchases.
For example, let's say you ordered a computer and the store promises to deliver it in two weeks. The computer doesn't arrive, but a charge for it shows up on your next credit card statement.
If you paid for the computer with cash, the store has your money and it's totally up to you to try and get a refund or resolve the situation.
Under the federal Fair Credit Billing Act (FCBA), however, if you have a problem with merchandise or services that you charged to a credit card, you are supposed to have an ally -- the credit card issuer.
If you complain to your credit card company, the law requires the issuer to investigate the discrepancy. The issuer then has to take the charge off your bill or explain why it is correct.
This investigation must occur within two billing cycles and not later than 90 days after the issuer receives your complaint. In addition, you don't have to pay that portion of the credit card bill or related interest charges while the dispute is being investigated. Essentially, you're not out the money while the mess is being cleaned up.
The FCBA applies to "open end" credit accounts, such as credit cards, and revolving charge accounts, such as department store accounts.
Here are the types of billing errors or disputes covered by the FCBA:
* Charges that list the wrong date or amount.
* Charges for goods and services you didn't accept or weren't delivered as agreed.
* Math errors.
* Failure to post payments and other credits, such as returns.
* Unauthorized charges. These can include a service you may have signed up for but then canceled.
Your rights under the FCBA aren't automatic. First, call the retailer to try to settle the dispute. If you get nowhere, then call your credit card company. Sometimes that's all it takes.
If a telephone call doesn't solve the problem, you may need to write a letter to the credit card issuer. You should include your name, address, account number and a description of the billing error. Send the letter by certified mail, return receipt requested, to the bank that issues your credit card. Be sure to send it to the address for billing errors, not the place where you send your payments. For a sample dispute letter, go to www.ftc.gov/bcp/conline/pubs/credit/billed.htm. Your letter has to reach the issuer within 60 days after the first bill that contained the error.
In practice, getting help from the issuer doesn't always go smoothly. So be sure to keep your credit card receipts (never send the original). Make a note of any customer service people you talked with, including the time and day you called. If possible, have the merchant send you a written confirmation of the sale and any delivery promise.
If you still have problems with a credit card bill, contact the Office of the Comptroller of the Currency's Customer Assistance Group, which offers help to consumers with complaints about national banks and their subsidiaries. The agency (www.occ.treas.gov/customer.htm) can be reached at 800-613-6743, or send an e-mail to email@example.com.
Here are some other good reasons to use a credit card:
* You get to use other people's money. If you're going to make a large purchase, time it so that you buy a day or two after the closing date of your card's billing cycle. If your card has a grace period (and that amount of time is shrinking every year for many cardholders) then you can let your money sit in the bank a little longer earning interest (however pitiful it is these days). Check your credit card statement to find out your billing closing date.
* You don't have to carry a large sum of money around. If your wallet is stolen, your cash is gone. But if your credit card is stolen, you're protected. Under the FCBA, if your card is used without your permission, you can be held responsible only for up to $50 per card (and even then most card companies won't make you pay the 50 bucks).
* It helps you to keep a record of your spending. My husband and I reluctantly went back to using our credit cards because we had a lot of cash purchases we couldn't remember. But please be careful with this money-management strategy. A number of surveys show people tend to spend more when they use plastic. Treat your credit card as if it were cash. Try to charge only what you can pay off the next month or soon thereafter.
Although I worry about the high level of credit card debt many folks carry, I grudgingly admit that this plastic is a necessary evil with a number of perks that cash doesn't offer.
Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online at www.npr.org. Readers can write to her in care of The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or send e-mail to firstname.lastname@example.org.