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Purchase protection on balance transfers

By

To Her Credit
To Her Credit, Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs. See her website SallyHerigstad.com for more personal finance tips and free budgeting worksheets.
Ask Sally a question, or read her previous answers in the To Her Credit archive
Question for the CreditCards.com expert

Dear To Her Credit,
I recently made a large purchase (my wedding dress) on a credit card. I am considering transferring the balance to another card with a better interest rate. However, I was wondering if my purchase will still be protected if I transfer the balance?

I noticed that sometimes credit cards give a time limit of 60 days for disputing a transaction, but I may not know if there are issues with my wedding dress order until after that.

Do you know if I would still be covered after the 60 days, and also if I transferred the balance? -- Jacque

Answer for the CreditCards.com expert

Dear Jacque,
Your purchase is still covered even if you transferred the balance to another credit card, just like it would be if you had paid it off.

That's a good thing, because if you use your credit card for many purchases every month, it would be almost impossible to determine which purchases have been paid for already and which ones are still in your balance. (That's one of the problems with credit card balances -- we don't really know what they're all from!)

Besides, if purchases were only protected until they were paid off, cardholders might use that as a reason to put off paying their bills in full. They could rack up big interest bills for months just because they were waiting to see if their purchases worked out. Fortunately, that's not necessary.

When you buy something using your credit card, the bank charges the merchant a processing fee. Part of that fee is to cover the purchase protection provided by the credit card company. The bank may or may not also make money charging interest if you carry a balance, but that has nothing to do with your purchase protection.

Credit card balance transfers

The length of time you have to notify the credit card company depends on whether you have a transaction dispute or a dispute over the quality of goods or services. A transaction dispute occurs when you don't know who the biller is, they billed you twice or the dress never arrived. You have a dispute over quality, on the other hand, if the dress is poorly made or falls apart before you can get up and down the aisle.

You must notify the credit card company within a specified period of time, generally 60 days, about a transaction dispute. It's tempting, when the bill comes, to pay it now and look closely at each transaction later. However, it's easy to miss the deadline for catching billing errors and other problems that way. Make a habit of reading your whole statement as soon as you open it, and make sure you know what you're paying for.

If you have a dispute over the quality of goods or services, you have a more flexible time frame. Exactly how much time is not spelled out, but if you are ordering your wedding dress several months before the wedding, that should give you plenty of time to decide if the dress is made to your satisfaction.

If you do have problems with the dress, first try to work something out with the merchant. If you don't have any luck there, write to your credit card company and explain the problem. Include your name and account number, the dollar amount of the purchase, the problem you are having, and what you would like to do. (For example, return the dress and get your money back.)

Go ahead and transfer the balance to another lower interest credit card or pay it off. Paying less interest is good for your pocketbook, and it won't lessen your consumer protection through your credit card.

Take care of your credit!

See related: Don't be caught off guard by limited purchase protection

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Published: May 19, 2009


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