Defective Goods or Services

Your new sofa arrives with only three legs. You try to

return it; no luck. You ask the merchant to repair or replace

it; still no luck. The Fair Credit Billing Act allows you to

withhold payment on any damaged or poor quality goods or

services purchased with a credit card, as long as you have made

a real attempt to solve the problem with the merchant.

This right may be limited if the card was a bank or travel

and entertainment card or any card not issued by the store

where you made your purchase. In such cases, the sale:

-- must have been for more than $50; and

-- must have taken place in your home state or within 100

miles of your home address.

Prompt Credit for Payments and Refunds for Credit Balances

Some creditors will not charge a finance charge if you pay

your account within a certain period of time. In this case, it

is especially important that you get your bills, and get credit

for paying them, promptly. Check your statements to make sure

your creditor follows these rules:

Billing. Look at the date on the postmark. If your account

is one on which no finance or other charge is added before a

certain due date, then creditors must mail their statements at

least 14 days before payment is due.

Crediting. Look at the payment date entered on the

statement. Creditors must credit payments on the day they

arrive, as long as you pay according to payment instructions.

This means, for example, sending your payment to the address

listed on the bill.

Credit Balances. If a credit balance results on your

account (for example, because you pay more than the amount you

owe, or you return a purchase and the purchase price is

credited to your account), the creditor must make a refund to

you. The refund must be made within seven business days after

your written request, or automatically if the credit balance is

still in existence after six months.

Canceling a Mortgage

Truth in Lending gives you a chance to change your mind on

one important kind of transaction--when you use your home as

security for a credit transaction. For example, when you are

financing a major repair or remodeling and use your home as

security, you have three business days, usually after you sign

a contract, to think about the transaction and to cancel it if

you wish. The creditor must give you written notice of your

right to cancel, and, if you decide to cancel, you must notify

the creditor in writing within the three-day period. The

creditor must then return all fees paid and cancel the security

interest in your home. No contractor may start work on your

home, and no lender may pay you or the contractor until the

three days are up. If you must have the credit immediately to

meet a financial emergency, you may give up your right to

cancel by providing a written explanation of the circumstances.

The right to cancel (or right of rescission) was provided

to protect you against hasty decisions--or decisions made under

pressure--that might put your home at risk if you are unable to

repay the loan. The law does not apply to a mortgage to finance

the purchase of your home; for that, you commit yourself as

soon as you sign the mortgage contract. And, if you use your

home to secure an open-end credit line--a home equity line, for

instance--you have the right the cancel when you open the

account or when your security interest or credit limit is

increased. (In the case of an increase, only the increase would

be cancelled.)

Lost or Stolen Credit Cards

If your wallet is stolen, your greatest cost may be

inconvenience, because your liability on lost or stolen cards

is limited under Truth in Lending.

You do not have to pay for any unauthorized charges made

after you notify the card company of loss or theft of your

card. So keep a list of your credit card numbers and notify

card issuers immediately if your card is lost or stolen. The

most you will have to pay for unauthorized charges is $50 on

each card--even if someone runs up several hundred dollars worth

of charges before you report a card missing.

Unsolicited Cards

It is illegal for card issuers to send you a credit card

unless you ask for or agree to receive one. However, a card

issuer may send, without your request, a new card to replace an

expiring one.

Prepaid Services, No Turndowns, No Credit Check, No Employment Needed!