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    Using CR Cards

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    Flaviub23
    1) A credit card allows users to make purchases on credit and pay them off over time through monthly payments, while a charge card requires payment in full each month. When applying for a card, issuers consider an applicant's credit history and ability to repay. 2) The key advantages of credit cards include making purchases without cash, convenient record keeping, ability to pay for large purchases over time in installments, and consumer protections for defective purchases. Disadvantages include the risk of overspending, high interest charges, and potential fraud or theft. 3) When a credit card purchase is made, the merchant is paid by the issuer and the cardholder is subsequently billed by the issuer. Cardholders must

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    Using CR Cards

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    Flaviub23
    141 views2 pages
    1) A credit card allows users to make purchases on credit and pay them off over time through monthly payments, while a charge card requires payment in full each month. When applying for a card, issuers consider an applicant's credit history and ability to repay. 2) The key advantages of credit cards include making purchases without cash, convenient record keeping, ability to pay for large purchases over time in installments, and consumer protections for defective purchases. Disadvantages include the risk of overspending, high interest charges, and potential fraud or theft. 3) When a credit card purchase is made, the merchant is paid by the issuer and the cardholder is subsequently billed by the issuer. Cardholders must

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    Using Cr Cards

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    Using Cr Cards

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    1) A credit card allows users to make purchases on credit and pay them off over time through monthly payments, while a charge card requires payment in full each month. When applying for a card, issuers consider an applicant's credit history and ability to repay. 2) The key advantages of credit cards include making purchases without cash, convenient record keeping, ability to pay for large purchases over time in installments, and consumer protections for defective purchases. Disadvantages include the risk of overspending, high interest charges, and potential fraud or theft. 3) When a credit card purchase is made, the merchant is paid by the issuer and the cardholder is subsequently billed by the issuer. Cardholders must

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    141 views2 pages

    Using CR Cards

    Uploaded by

    Flaviub23
    1) A credit card allows users to make purchases on credit and pay them off over time through monthly payments, while a charge card requires payment in full each month. When applying for a card, issuers consider an applicant's credit history and ability to repay. 2) The key advantages of credit cards include making purchases without cash, convenient record keeping, ability to pay for large purchases over time in installments, and consumer protections for defective purchases. Disadvantages include the risk of overspending, high interest charges, and potential fraud or theft. 3) When a credit card purchase is made, the merchant is paid by the issuer and the cardholder is subsequently billed by the issuer. Cardholders must

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    WHAT IS A CREDIT CARD?

    A credit card, such as VISA or MasterCard, allows you to pay for


    sales or services by borrowing against your line of credit with the
    credit card company and to make monthly payments on the
    outstanding balance. A charge card, such as American Express
    requires payment in full each month of the outstanding balance
    charged to the account.

    Card issuers are permitted to mail you an application or a


    solicitation for a credit card or to ask you by phone whether you
    want to receive a card and to send you a card if you say yes.

    WHAT ARE THE ADVANTAGES OF USING A


    CREDIT CARD?

    An issuer will consider your employment, current assets, current


    debts, and credit history when you apply for a credit of charge card.
    If you have had a poor credit history, some companies will issue you
    a "Secured" credit card. The issuer requires you deposit money in
    an account and allows you to make credit purchases up to the
    amount on deposit. Consumers who wish to use such plans to
    rebuild their credit record should make certain that the deposits are
    held in a protected escrow account.

    4 They allow you to make purchases on credit without carrying


    around a lot of cash.

    HOW DOES A CREDIT CARD WORK?

    4 They allow accurate record-keeping by consolidating purchases


    into a single statement.
    4 They allow convenient ordering by mail or phone.
    4 They allow you to pay for large purchases in small, monthly
    installments.
    4 Under certain circumstances, they allow you to withhold payment
    for merchandise which proves defective.

    WHAT ARE THE DISADVANTAGES?


    4 The ease of using credit cards, combined with impulsive buying,
    may result in over-spending.
    4 High interest rates, as well as other costs make credit cards a
    relatively expensive method of obtaining credit.
    4 Lost or stolen cards may result in some expense ($50.00) and
    inconvenience.
    4 The use of multi-credit cards can get you even further into debt.
    4 Fraudulent or unauthorized charges may take months to dispute,
    investigate, and resolve.

    How Do I Get a Credit Card?


    You must complete an application. A credit card can not be issued
    unless requested. Issuers often acquire names of consumers with
    good credit ratings from a credit reporting agency and send the
    consumers "preapproved" applications.

    When you have been issued a credit card you are given a line of
    credit. You can make purchases or receive cash advances up to
    that amount with your card. When you make a purchase, the
    merchant gives proof of your purchase to the credit card company
    and they pay the merchant on your behalf; in effect granting you a
    loan.
    The credit card issuer then bills you for reimbursement of the
    purchase or cash advance amount. You can either pay the balance
    in full or make payments. The issuer must send you periodic billing
    statements giving you information on your account which includes
    the minimum payment due, date it is due, and the periodic interest
    rate on unpaid balances.

    CAN A MERCHANT CHARGE ME MORE IF I


    USE A CREDIT OR CHARGE CARD?
    YES, but if a merchant charges you more for using a credit or
    charge card, that fact and the additional amount must be disclosed
    to you before the sale is made. A merchant can also offer a discount
    to customers who pay cash.

    WHAT ARE MY CREDIT CARD PROTECTIONS?


    Federal law protects consumers when they use credit cards.
    Protections include the following items:
    Prompt Credit for Payments. A card issuer must credit your
    account on the day the issuer receives your payment, unless the
    payment is not made according to the creditor's requirements or the
    delay in crediting your account does not result in a charge.
    Refunds of Credit Balances. When you return merchandise or pay
    more than you owe, you have the option of keeping the credit
    balance on your account or requesting a refund. To obtain a refund,

    write the card issuer. The card issuer must send you the refund
    within seven business days of receiving your request. Also if a credit
    balance remains on your account for more than six months, the card
    issuer must make a good faith effort to refund the credit balance.
    Errors on Your Bill. There are specific rules that the card issuer
    must follow for promptly correcting billing errors. The issuer must
    furnish you a statement describing the rules when you open a credit
    card account and at least once a year after that. Many issuers print
    your rights on their monthly billing statements. You must notify the
    issuer in writing at the address specified for billing errors within 60
    days after the first bill containing the error was mailed to you. The
    issuer must look into the problem and either correct the error or
    explain to you why the bill is correct not later than 90 days after the
    issuer receives your billing error notice. During that period you do
    not have to pay the disputed amount or interest on that amount.
    Unauthorized Charges. If your credit card is used without your
    authorization, you can be held liable for up to $50 per card. If you
    report the loss before the card is used, federal law says the card
    issuer cannot hold you responsible for any unauthorized charges. If
    you have a lost or stolen credit card, report the loss as soon as
    possible. Most issuers have a toll-free number in service 24 hours.
    You should follow-up your phone call with a letter.
    Disputes About Merchandise or Services. If you have a problem
    with merchandise or services that you charged to a credit card and
    have made a good faith effort to work out the problem with the
    seller, you have the right to withhold from the card issuer payment
    for the merchandise or services. If the card you used is a bank card
    or another card not issued by the seller of the defective
    merchandise, you can withhold payment only if the purchase
    exceeded $50 and occurred in your home state or within 100 miles
    of your billing address.

    WHAT SHOULD I DO IF MY CREDIT CARDS


    ARE LOST OR STOLEN?
    Phone the credit card company immediately, and report that your
    card is lost or stolen. Your monthly billing statement will list the
    phone number for reporting lost cards. Be sure to get the name of
    the person you talked to. The issuer will cancel your card so no
    unauthorized charges can be made on it.
    To create a record for the company and for your own files, write to
    the company after you have phoned. Include your name, address,
    account number, the date you believe the card was lost or stolen,
    and the name of the person you spoke to when you called the
    company.

    You will not be liable if you notify your issuer that your cards were
    lost or stolen before unauthorized charges are made. If your cards
    are used before you report them missing, the most you can be liable
    for is $50 per account.

    REMEMBER. . . .
    u

    Make sure you understand the terms of a credit card plan


    before you accept the card. Review the disclosures of terms
    and fees that must appear on credit-card offers.

    Keep copies of sales slips and promptly compare charges


    when your bills arrive. Pay bills promptly.

    Protect your credit cards and account numbers to prevent


    unauthorized use. Draw a line through blank spaces above the
    total when you sign receipts. Rip up or retain carbons.

    Do not give out your card number over the phone unless you
    know the business or unless you initiated the call.

    Keep a list of your credit card numbers and the telephone


    numbers of each card issuer in a safe place in case your cards
    are lost or stolen.

    WHERE TO GO FOR HELP. . . .


    The following federal agencies are responsible for enforcing federal
    laws that govern credit card transactions. Questions concerning a
    particular card issuer should be directed to the enforcement agency
    responsible for that issuer.
    National Banks:
    Comptroller of the Currency
    Compliance Management
    Mail Stop 7-5
    Washington D. C. 20219

    Federal Credit Unions:


    National Credit Union Administration

    1776 G St., N. W.
    Washington D. C. 20456

    Non-Member Federally Insured Banks:


    Federal Deposit Insurance Corporation
    Office of Consumer Programs
    550 Seventeenth Street, N.W.
    Washington, D.C. 20429
    Other Credit Card Issuers:
    Federal Trade Commission
    Division of Credit Practices
    Bureau of Consumer Protection
    Washington D C 20580

    The Indiana Department of Financial Institutions, Division of


    Consumer Credit has many other credit related brochures available,
    such as:
    Answers to Credit Problems
    Applying for Credit
    At Home Shopping Rights
    Bankruptcy Facts
    Buried in Debt
    Car Financing Scams
    Charge Card Fraud
    Choosing A Credit Card
    Co-Signing
    Credit and Divorce
    Credit and Older Consumers
    Deep in Debt?
    Equal Credit Opportunity
    Fair Credit Reporting
    Fair Debt Collection
    Gold Cards
    Hang up on Fraud
    High Rate Mortgages
    Home Equity Credit Lines
    How to Avoid Bankruptcy
    Indiana Uniform Consumer Credit Code
    Look Before you Lease
    Mortgage Loans
    Repossession
    Reverse Mortgage Loans
    Rule of 78s What is it?
    Scoring for Credit
    Shopping for Credit
    Using Credit Cards
    Variable Rate Credit
    What is a Budget?
    What is the DFI?

    Call our toll-free number or write to the address on the cover for
    a copy of any of the brochures listed or for further consumer
    credit information. You can also access information at our web
    site on the Internet: http://www.dfi.state.in.us, then click on
    Consumer Credit.

    USING
    CREDIT
    CARDS

    DEPARTMENT OF FINANCIAL INSTITUTIONS


    Consumer Credit Division
    402 West Washington Street, Room W066
    Indianapolis, Indiana 46204
    317-232-3955
    1-800-382-4880
    Web Site http://www.dfi.state.in.us

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