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).
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
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.
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.
Sally Herigstad answers questions about credit every week for CreditCards.com. Herigstad is a certified public accountant, author and speaker. She also writes regularly for MSN Money, Interest.com, Bankrate.com and RedPlum.com, and has been a guest on Martha Stewart radio and other programs. You can read more about personal finance and download free budgeting worksheets at her website: www.sallyherigstad.com
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
Published: May 19, 2009
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Balance transfer basics
