Wednesday, January 9, 2019

CREDIT CUSHION

Credit cards are protected under the Fair Credit Billing Act. This law gives the consumer the right to withhold payment on poor-quality or damaged merchandise purchased with a credit card. "It's wonderful. It's a great law there," says E. Thomas Garman, distinguished scholar at The InCharge Institute and author of more than 20 books on personal finance. "You've got Visa on your side."

Under the law, you do need to make a real effort at resolving the dispute with a merchant before you can ask your issuer to stop a credit card payment. There are a few other catches as well. The sale must be for more than $50 and have taken place in your home state or within 100 miles of your home address. Few issuers enforce the $50 or 100-mile rule on purchases made in the United States. "No one's following that rule. That's crazy," Garman says. "I've heard of no one ever using that."

So with a credit card you have the option of withholding payment should you be unsatisfied with the quality of an item. Ditto for an item purchased with a personal check. You simply call your bank and ask them to stop payment before the check clears.

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