By Alan Herbert, Coins Magazine January 20, 2010

Almost everyone has a credit card—or a half dozen different cards—some even more. Most credit card users are completely in the dark when it comes to just how to use their card to gain the most benefit from it—and I’m not talking about running up bills by treating your cards as a limitless supply of money. Unless you read the fine print in your card contract, you could be paying close to 30 percent interest on your credit card debt. In my day this was a crime called usury, but the card companies have juggled it around so that today it is legal.

Naturally the card companies want you to run up huge amounts of debt, as they are making a tremendous profit. They won’t tell you that you can avoid this by paying off your account each month. Simply stated, if you don’t have the money in the bank, don’t buy anything.

A key problem that all of us run into is an overcharge. Here are some tips on avoiding a loss. If you have been overcharged, the seller is the second call you should make. The first call should be to notify your credit card company immediately. Do not wait for the dealer to correct it, as you have to notify the card company within 120 days or there is no way to recover the money. By the time you receive your card company bill the matter is out of the seller’s hands anyway.

Anyone who uses a credit card for any purchase should be aware of this, as it is a standard practice, although there may be a differing limit on the time you have to make your call. Always check your credit card bill as soon as you receive it. Computers, and the people who run them, can and do make mistakes.

Debit cards are another matter entirely. My only comment on them is that I’ve managed to survive four decades without one, so I don’t recommend them.

Here’s an example of a common problem: A reader got a card company bill, showing that the U.S. Mint had billed him for coins he didn’t order. Unfortunately, by the time this reader wrote to me it was too late. Instead of notifying his credit card company, he first wrote to the Mint. When the Mint didn’t respond, he wrote to me.

Upon reading his letter, I called his credit card company and found that, like all of them, this firm has a 120-day period after you receive your bill during which you can notify them of any discrepancies. In this case the deadline expired several days before I received his letter.

Best advice, read your credit card bill when it comes in. If there is any problem, call them at once. By not doing this, the customer probably has lost the more than $100 that he was billed.

Your credit card company may have a different reporting period, so do it immediately to avoid problems like this. I had a similar double bill recently from a different company, so their computers do make mistakes.

Without going through this procedure the Mint cannot legally return the money to the customer, as it is still an obligation to the credit card company. Once you use a credit card you lose any direct connection with the seller and the transaction and any subsequent consequences have to be handled through the procedures specified by the credit card company. Since most of the credit card companies have the same or similar rules it doesn’t make much difference what card you have. If you don’t follow their rules you forfeit your right to the money you owe them.

In an age where identity theft is a growing, and a serious problem, it is vital you contact your card company immediately if your card is lost, stolen or compromised. When your bill arrives in the mail, go through it and confirm every transaction.

I recently spotted a charge on my monthly bill that turned out to be from a major Internet company. Although I do business with this firm, I knew that there was no charge outstanding. I notified them immediately and the charge was refunded. They refused to confirm that they had a problem and would not tell me the circumstances.

Many firms will refuse a credit card to pay for a small purchase. I’ve seen people offer a card to pay a $2 or $3 bill. Some firms put a $10 minimum on a card transaction, so that’s a good rule to follow—if for no other reason than avoiding the embarrassment of having your card refused.



More Resources:

• Subscribe to our Coin Price Guide, buy Coin Books & Coin Folders and join the NumisMaster VIP Program

• 2010 U.S. Coin Digest, The Complete Guide to Current Market Values, 8th ed.

• State Quarters Deluxe Folder By Warmans

• Standard Guide to Small-Size U.S. Paper Money, 1928 to Date

• Strike It Rich with Pocket Change, 2nd Edition