From: adams@spss.com (Steve Adams)
Subject: misc.consumers FAQ on credit part 2 of 3
Date: Thu, 30 Jul 1992 14:51:24 GMT
Distribution: usa
Expires: +45 days
Organization: SPSS Inc.
Keywords: credit-cards chargebacks consumer-rights
Followup-To: misc.consumers

Archive-name: consumer-credit-faq/part2
Last-modified: 30 July 1992


This FAQ (Frequently Asked Questions) list should be a repository of the
canonical "best" answers.  If you know a better answer or a change that
improves an answer, please tell me!  (Use email, please.  Traffic in
this group is high, and I might miss a relevant posted article.)

                      Steve Adams, SPSS, Inc., Chicago, IL, USA
                                                        adams@spss.com

Because this list is quite long, I am posting it in three parts:
    part 1 of 3: detailed contents and introduction
    part 2 of 3: credit cards (this file)
    part 3 of 3: credit reports
Please read the disclaimers, acknowledgements, and general information
in part 1.  (The most important disclaimer is that I am not a lawyer and
this file is not to be construed as legal advice.)


Some helpful free pamphlets are available from the FRB.  You can write
to Board of Governors of the Federal Reserve System, Publications
Services, MS-138, Washington DC 20551 for these among others:

    - How to File a Consumer Credit Complaint
    - Consumer Handbook to Credit Protection Laws

The phone number is (202) 452-3244 in case they accept phone orders.

See part 1 of this FAQ list to obtain a catalog of FRB publications,
including many on home-equity loans and other home mortgages.


section 1. Credit cards, other cards
====================================

    EDITOR's NOTE:  I rarely use credit cards, but did use them quite
                    a bit in the past.  This information is compiled 
                    from numerous sources, and is as accurate as such
                    information can be. 

    This section tells you about the types of credit cards, and some
    non-credit cards.

Q101. What kinds of cards are there?

    - "bank cards," issued by banks:  Visa, MasterCard, and Discover;

    - "travel and entertainment (T&E) cards" like American Express and
      Diners Club;

    - "house cards" that are good only at the stores of one chain.
      Sears is the biggest one of these, followed by the oil companies
      and phone companies and on down to your local department store.

    T&E cards and national house cards like Sears have the same terms
    and conditions wherever you apply.

    Bank cards are issued by the bank you apply to, which is why terms
    and fees vary widely among banks.  However, MasterCard International
    and Visa U.S.A. Inc. do establish minimum standards and rules.
    Bank cards have some subspecies, described below.

Q102. What is an affinity card?

    An affinity card carries the logo of an organization in addition to
    the emblem of the card.  It is typically a Visa or MasterCard.

    Sometimes card users get frequent-flyer miles or points toward
    merchandise from a catalog.  The organization solicits all its
    members to get cards (or even turns over its mailing list).  In
    return it gets some fraction of the annual fee or of the finance
    charge, or some amount per transaction, or a combination of
    incentives.  Seldom does the organization get much money out of it:
    most of the profits go to the card issuer.

    See section 2, "Good deals, bad deals," for how to evaluate these
    offers.

Q103. Is MasterCard better than Visa, or vice versa?  What about
      American Express, Diners Club, etc.?

    In the U.S., almost any establishment that takes MasterCard takes
    Visa, and vice versa.  In Europe, many establishments take just one
    or the other.  If you're going to be doing all your spending in the
    U.S., you may not want or need both cards.

    American Express, Diners Club, and their kin were originally aimed
    at the more upscale "travel and entertainment" market.  They are
    accepted at many places, though not as many as Visa and MC.  Some
    places don't take MC and Visa but do take American Express or DC.

    I don't have an AmEx card, but someone who does posted a list of the
    benefits he had actually used in a year and concluded that the card
    was worth more money to him than the annual fee.  He cited student
    and non-student discounts for air travel, extra frequent-flyer miles
    for a variety of airlines, and "twofers" at some big-city
    restaurants.  Your benefit will be different if your charging
    patterns are different.

    The best card for you is the one that is accepted where you shop and
    charges you the least amount of money for the services you actually
    use.  (For example, if you always pay off your balance each month,
    you want to make sure you get a card with a grace period but the
    interest rate doesn't matter much.)

Q104. Why does my neighbor's MasterCard or Visa have different rates and
      fees from mine?

    MasterCard and Visa rates are set independently by the banks that
    issue them.  In fact, a given bank may offer several different rate
    and fee schedules.  Sometimes you can pick which one you want; other
    times the bank will offer you a single set of terms with no option,
    even though it offers another customer a different set of terms.
    That's why it's worth shopping around rather than just applying for
    "a MasterCard" or "a Visa."  See section 2, "Good deals, bad deals."

    This is not true of the T&E cards.  One American Express green card
    is like all other American Express green cards in the country.
    (Corporate AmEx cards may vary from individual ones.)

Q105. What is a secured card?

    Secured cards require you to make a bank deposit up front.  The
    limit on the card is usually related to the amount of the bank
    deposit.  The bank has the right to take money from your deposit if
    you don't pay your bill.

    Secured cards are usually sold to people who have credit problems
    and can't get a regular "unsecured" card.  But a secured card from a
    bank may be a good deal for anyone; see section 2, "Good deals, bad
    deals."

    A secured MasterCard or Visa looks just like a regular one, and the
    law ensures that it has all the same consumer protections built in.


Q106. What is a guaranteed card?

    It's another name for a secured card, typically offered through 900
    numbers.  Though technically legal, these are not a good deal for
    the consumer when they carry an application fee or a 900-number
    charge; see section 2, "Good deals, bad deals."

Q107. What is an unsecured card?

    You may not often hear this term.  Technically, a "regular" card is
    unsecured.  This means that the bank can't take specific assets of
    yours if you don't pay the loan, but rather they have to sue you or
    force you into bankruptcy.

Q108. What is a debit card?

    As its name implies, it is not a credit card.  Instead of running up
    a bill for you at the end of the month, the debit card runs down
    your account at the moment the sale is made.  Merchants like these
    because they get instant payment without worrying about bad checks.

    Debit cards are convenient.  But it's a lot more painful to resolve
    a problem if the money is gone from your account (as with a debit
    card) than if it's just numbers on a piece of paper (as with a
    credit card).  And if you lose a debit card, your whole account can
    be cleaned out with no recourse for you.  You decide whether you
    want to take on that risk.

    Consumers in the know don't like debit cards because they give you
    less protection in case of disputes than credit cards do.  (See
    section 5, "Billing errors and overcharges.")

Q109. How does an ATM card differ from a debit card?

    An ATM (automatic teller machine) card is a form of debit card, but
    you use it in a cash machine by punching in your code number.  (In
    common speech, "debit card" means the kind that looks like a credit
    card, where you sign for purchases.)

    The ATM card is a little less dangerous if you lose it, since nobody
    can use it to drain your account without your PIN (personal identi-
    fication number).  Also, most banks limit the amount of cash that
    can be withdrawn every day on an ATM card.  On the other hand a Visa
    or MC debit card lets where a thief clean out your whole account
    with one purchase.

    By the way, some banks are now issuing combined ATM-debit cards.
    Depending on your viewpoint, this gives you the advantages or the
    disadvantages of both.

Q110. Where can I find information about telephone credit cards?

    Subscribe to the newsgroup comp.dcom.telecom and watch for the
    periodic posting on how to use the Telecom archives.  Please don't
    post requests for credit-card information there.

    You should also be aware of hybrid cards like the AT&T Universal
    card (both MasterCard and Visa) and the Ameritech Complete
    MasterCard, which act like regular bank cards but also let you
    charge phone calls.


section 2. Good deals, bad deals
================================

This section guides you to the questions you should ask yourself in
evaluating any credit card before you apply.

Q201. In general, what should I look for in a credit card?

    There are three principal features to the card itself:  interest
    rate, annual fee, and grace period.  By law, all must be disclosed
    at the time you apply.  (They are discussed in the following Qs.)

    Some cards, such as Discover and the new Ameritech Complete Master-
    Card, pay rebates as well.  Some cards offer other features like
    frequent-flyer miles and extended warranties on purchases.  You have
    to decide how much those are worth to you.

    Also important is the pattern of your shopping:  a card that your
    favorite merchants don't honor isn't much good to you.

Q202. Do I want a fixed-rate or floating-rate (variable-rate) card?

    The interest rate is the rate charged on purchases and cash advances
    (generally two different rates).  It can be fixed or floating.
    Fixed rates are not truly fixed, because the banks will change them
    every year or so.  Floating rates are typically a bit lower than
    fixed rates, but fluctuate every month according to the latest
    T-bill sale, or the phase of the moon, or whatever.  If you buy
    something you're expecting to pay off over many months, this makes
    it hard to guess how much finance charge you'll be paying.

    Floating rate and variable rate mean the same thing.

    Years ago, credit-card issuers would quote an interest rate that was
    not directly comparable with other lenders' rates because the method
    of computation was not standard.  Now the law requires lenders to
    quote an Annual Percentage Rate (APR) so that you can compare cards.

    Interest rates are all over the map.  In a recent {Wall Street
    Journal} list, a secured card was as low as 8.0% and an unsecured
    card as low as 10.5%; you may also see interest rates as high as
    21.9%.

Q203. How do annual fees work?

    The annual fee is, well, a fee that the card issuer bills to your
    account annually.  Every year, on the anniversary of the date your
    account was opened, the fee for the coming year is billed to your
    account.  Typical charges are $18-$20 for regular bank cards (about
    $40 for gold bank cards) and anywhere from $35 on up for various
    flavors of T&E cards.  House cards are typically free.

    Many lenders waive the fee the first year to get you to sign up,
    then depend on you to forget a year later that you'll be charged an
    annual renewal fee.  There's nothing shady about this as long as
    it's disclosed up front.

    The AT&T Universal Card no-annual-fee offer has expired.  If you
    don't have an AT&T Universal Card now, you can apply for one but you
    may have to pay an annual fee.  However, AT&T is still inviting some
    people to apply for a no-fee card.

Q204. Can I get the annual fee waived at renewal time?

    Many lenders have "secret" programs in effect where if you ask them
    they will waive the annual fee.  (AT&T confirmed on 19 March 1992
    that it is waiving the fee on its Universal cards for at least some
    customers who ask.)  Some do it only if you charge a certain amount
    per year; others have other criteria.  It certainly can't hurt to
    call just before renewal time and ask.  (If you wait until after the
    fee is already on your statement, your chances aren't as good.)

    Some banks will waive the annual fee if you tell them that you'll go
    elsewhere if you have to pay it.  Others will not.  You may want to
    ask (politely) to talk to a supervisor, since the front-line person
    may not care whether you cancel your card and may not have the
    authority to make concessions.  Don't bluff on this unless you are
    confident you can get a card elsewhere.

    One article in Usenet reported that the author called Citibank to
    cancel his Visa card because of the annual fee.  They would not
    waive the fee but said they would send him a gift certificate for
    the same amount if he kept his card.

Q205. What about application fees?

    These are extremely uncommon.  Though such fees are legal, look long
    and hard at the terms before you agree to pay an application fee,
    even if you are "guaranteed" acceptance.  You can almost certainly
    do better elsewhere.  (See the "900" numbers later in this section.)

Q206. What other fees should I be concerned about?

    Many cards assess an "over-limit fee" if you charge something that
    takes you over your credit limit.  They may or may not allow the
    charge if they assess this fee.  $5-$10 is common.

    Some cards charge a late payment fee in addition to the finance
    charges.  Again, $5-$10 is common.

    Some cards charge a transaction fee for cash advances.  This may be
    a flat amount (around $2), a percentage (1%-2% is common), or a
    combination.  These fees are in addition to the stated interest
    rate, which usually starts accruing as soon as you get the money.

    You have the right under the law to know what all these fees are
    when you apply.

Q207. Why is a grace period important?

    The grace period is the time after the billing date that you have to
    pay off the bill without paying finance charge.  (Grace periods for
    cash advances are pretty rare, since the bank would lose money on
    them.)  T&E cards typically have generous grace periods; bank cards
    usually have 25 days but a few have 30 and many have no grace
    period.  In every case the grace period runs from the date printed
    on the bill, not from the date you get the bill.

    For instance, suppose your bill is prepared on the 28th of every
    month and the grace period is 25 days.  If you make a purchase on
    July 3 it will show up on the July 28 bill and you'll have until
    August 22 (July 28 plus 25 days) to pay it off for free.  If you
    don't pay the full balance, your August bill will show a finance
    charge, and so will every bill after that until you pay off your
    full balance.

    Some banks give you a grace period only in months when your previous
    balance is zero.  Others (fewer of them all the time) give the
    stated grace period on all new purchases even if you have a balance
    from last month.  The second method can save you big bucks; be sure
    to find out how your bank does it when you apply for the card.

Q208. Why is a discount better than a rebate?

    Rebates are a percentage refund on your purchases, either by check
    or by credit to your account.  Discounts actually reduce the price
    on the bill before you pay it.  Discover offers rebates on all
    purchases.  The Ameritech Complete MasterCard gives 10% rebates on
    credit-card calls at the end of the year, where the AT&T Universal
    card gives 10% discounts on credit-card calls.  On the principle
    that it's always better to keep money in your account than to pay it
    out and get some of it back later, discounts are better than rebates
    if the numbers are otherwise equal.

Q209. What else should I watch out for in cards with rebates?

    First, when will the rebate be issued, at the end of the month or at
    the end of the year?  (Typically, it's after the end of the year.)

    Second, how is the rebate calculated?  Be sure to read the fine
    print.  For example, Discover advertises "up to 1%" rebate.  That's
    true; but the fine print shows that you get back 1% of every dollar
    you charge after $3000 a year; the first $3000 is rebated at rates
    between a quarter and three quarters of a percent.  (Confirmed by
    telephone, 1991 Oct 14, and by personal experience.)

Q210. How do I evaluate a secured card?

    Use the same criteria as for any other card.  Ask the bank some
    additional questions:  What interest is paid on the deposit?  If I
    maintain a good credit record, when could I be considered for an
    unsecured card?

    Also ask yourself if you might conceivably have need for the
    deposited funds during the required term.  If so, find out up front
    whether you can withdraw the deposit in case of financial emergency,
    and what it costs in interest and penalties to do that.

    You will want a secured card if you don't qualify for an unsecured
    one but you need credit.

    You may want a secured card even if you could get an unsecured card.
    Why?  Since a secured card represents less risk to the bank,
    interest rates may be lower than for unsecured cards.  (Two recent
    surveys showed an Illinois bank's secured card with a grace period
    and no annual fee that had the lowest interest rate in the surveys.)

Q211. Shouldn't I get as many cards as I can?

    Not necessarily.  The more cards you have, the fatter your wallet is
    and the more cards you have to keep track of.

    See section 7, "Credit bureaus and your credit rating," in part 3 of
    this list, for other reasons why having a lot of cards can be a
    problem.

Q212. Why would I want more than one of the same kind of card?

    Some people like having, say, two MasterCards or two Visas.  I don't
    see the advantages of such an arrangement.  I've heard some people
    say they charge a big-ticket item on one card and pay it off a
    little bit every month, while charging normal purchases to the other
    card and paying them off in full every month.  However, credit-card
    debt is about the most expensive way there is to finance a big item;
    you're almost certainly better off getting a loan from your bank or
    credit union.

    You might want to have a MasterCard and a Visa, or a bank card and a
    T&E card, to be able to charge at places that take one but not the
    other.  In this case, try to schedule the billing dates two weeks
    apart.  (Some card issuers will alter your billing date if you ask.)

Q213. Is a gold card worth the higher annual fee?

    Gold cards typically carry some of these perks:  collision damage
    waiver on auto rentals, travel insurance, extended warranty on
    purchases, roadside assistance, higher credit limits, frequent-flyer
    miles, and of course :-) prestige.

    Many non-gold cards also offer some or all of these.  The AAA offers
    roadside assistance.  Many standard auto insurance policies cover
    the CDW on rentals.  If you have a good record on your existing
    card, you can probably get your credit limit increased by calling
    the issuer.  There's no one answer to whether these cards are worth
    the extra money:  you have to decide what the perks and prestige are
    worth to you, and your neighbor could well come up with a different
    answer.

Q214. I was mailed a solicitation for a Visa or MasterCard that accrues
      frequent-flyer miles on my purchases.  Is this a good thing?

    It may or may not be.  Does the airline fly to places you really
    want to go?  How many dollars must you charge to earn a free ticket?
    Is the airline likely to be around by then?  Are you likely to spend
    more than you otherwise would, just to accumulate the miles?

    Ask yourself questions like these, in addition to all the others
    mentioned in this section.

Q215. I belong to the Benevolent Order of Mumble, and they mailed me a
      credit-card solicitation.  It would be a MasterCard with their
      logo on it.  Is this a good deal?

    This is an affinity card; see section 1, "Credit cards, other
    cards."  Evaluate an affinity card as you would any other.  If you
    would consider it a good deal in the open market, based on the way
    you use credit, then it's a good deal.  But an expensive card
    doesn't become a good deal just because a small fraction of the
    profits are turned back to your organization.  Unless the card is a
    good deal for you personally, it's a better idea to make a direct
    donation to your organization -- and you get a tax deduction too, if
    it's a charity.

216. My bank offered me a deal if I would agree to set up my checking
     account for automatic withdrawal on the due date to pay the credit
     card. Is this a good idea?

    It depends on the specific terms of the deal.  For example, a
    reduced interest rate is meaningless if you pay off every month
    anyway.

    It also depends on your own spending patterns.  If you tend to
    forget to pay your bills on time, this arrangement can save you some
    late charges or finance charges.  On the other hand, if you forget
    to enter the automatic withdrawal in your checkbook you may find
    you're overdrawn and start bouncing checks.

    Some consumers have reported problems with disputed charges being
    paid automatically, or the bank disregarding special requests to
    alter a scheduled payment.  You should weigh carefully this
    additional loss of control over your checking account against the
    benefits promised.

Q217. I got a call (or saw an ad) inviting me to call a 900 number for a
      "guaranteed" MasterCard or Visa.  Is this a good deal?

    No.  These offers require you to pay up front either for a specific
    secured card or (worse) for a list of banks that issue secured
    cards.

    Instead, if you need a secured card, apply to a bank that advertises
    them.  (Citibank in New York started a nationwide program of secured
    cards in late summer 1991.)

    Even better, ask your own bank about getting a secured card there,
    or referring you.  There's no charge for making the inquiry, and I
    have never heard of a bank charging a fee for a direct application.

    Finally, check the published lists (see section 3, "Lists of good
    cards"), and apply directly to banks listed there.

Q218. What should I watch out for in a corporate card?

    A "corporate card" is an ordinary card, typically American Express
    or Diners Club.  However, you don't apply for it.  It is issued to
    certain employees of a company for the company's convenience in
    managing travel expenses.  There are a couple of possible problems.

    First, you may be individually responsible for charges to the card,
    even though you use it only for business purposes.  This can be a
    problem if your company is very slow to reimburse you for expenses.

    Second, some cardholders have posted articles to the effect that
    corporate cards may not have the same buyer protections (like
    extended warranty) that personal cards do.

Q219. I saw an ad for a card I've never heard of.  What's the story?

    Be careful when applying for credit.  Some companies advertise
    credit cards on TV.  The problem is that although the card looks a
    lot like a Visa or MasterCard, it is only good for merchandise from
    the company's own catalog.  Despite the promise of "discount
    prices," you will pay more than you would pay in stores or through
    other mail-order channels.

    Most legitimate catalog companies take Visa, MasterCard, American
    Express, or some combination.  You should always pick merchandise
    for its own qualities, not because you're forced into it by which
    credit card you have.

Q220. I got an application for a card that didn't state interest rate
      and fees.  Is this legal?

    No.  The U.S.  Fair Credit and Charge Card Disclosure Act requires
    issuers of charge or credit cards (including retail stores) to
    reveal certain basic information in tabular form with the applica-
    tion or the "preapproved" solicitation.  This basic information
    includes interest rate (APR), annual fee, and grace period.
    Disclosures must also be provided before annual renewal if the card
    issuer imposes an annual fee.

    Source:  {Consumer Rights} pamphlet, mentioned in part 1 of this FAQ
    list.  If you have a problem, the agency to complain to depends on
    the nature of the card issuer (Federal Savings Bank, National Bank,
    credit union, etc.); see the pamphlet.


section 3. Lists of good cards
==============================

This FAQ list can't tell you which card is best for you.  Your spending
patterns and needs are different from others', and credit-card terms are
constantly changing.  What this section can and will do is give you a
few simple steps to find the information on your own.  Remember to
evaluate any card offer against the criteria in section 2, "Good deals,
bad deals."

Q301. Where are lists of the best cards?

    No one card is best for everyone.  Are you looking for a card with
    no annual fee?  low interest rate?  long grace period?  Do you want
    a secured card?  Lists are published in several places.

    - {Barron's}, an investment weekly, lists low-rate cards, no-fee
      cards, and the biggest card issuers near the back of the "Market
      Laboratory" section of every issue.

    - {Money} Magazine's "Money Scorecard" also carries a brief list of
      inexpensive credit cards, with phone numbers of the issuers.

    - {The Wall Street Journal} publishes a monthly list, lately on
      Friday of the first week of every month.  Look in the index on
      page C1 for "credit card rates."  (The most recent publication
      dates were Monday, 4 May, and Friday, 3 Apr.)

    Many libraries have back issues of some or all of these periodicals.
    Be sure to ask at the reference desk if you don't see them on
    display.

Q302. I don't want to look up magazines.  Isn't there an easier way?

    First, don't post a request to the net.  You may get some replies,
    but typically they'll be for banks out of your area and will be
    missing important information.  Besides, those repeated requests are
    just what this FAQ list is supposed to prevent, and you wouldn't
    want me to look foolish, would you?  :-)

    Fortunately, you can get a list by mail.  Here are your choices,
    from the May 1990 {Consumer Reports}.  (Prices may possibly have
    changed since then.)

    - Bankcard Holders of America, 560 Herndon Parkway suite 120,
      Herndon VA 22070:  send $1.50 for list of 50 "Fair Deal" banks
      (low interest rate on cards) or $1.50 for a separate list of
      no-fee cards.  Phone number: (800) 553-8025 or (703) 481-1110.

    - RAM Research, P O Box 1700, Frederick MD 21701: send $5.00 for
      500-bank "RAM Research Bankcard List" (updated monthly).

    - Consumer Credit Card Rating Service, P O Box 5219, Santa Monica CA
      90405: send $12.00 for "Credit Card Locator," over 100 no-fee
      cards, 200 more with fees under $15, and interest rates on cards
      from 1000 banks.

    Disclaimer:  I have not actually ordered from RAM or CCCRS myself.
    If you have any corrections from experience (not hearsay), please
    email me at adams@spss.com.

Q303. I understand why low rates or no annual fees are important.  Why
      would I care about which banks issue the most cards?

    A bank that issues lots of cards may be less choosy than a bank with
    fewer customers.  If you are expecting problems getting credit, the
    larger bank might be more willing to accept you.

Q304. Okay, I know that First Mumble Bank of Fubar has a card I want to
      apply for.  How do I get in touch?

    First, don't post a request to the net for their phone number.  This
    costs hundreds or thousands of dollars and wastes lots of people's
    time.  You may get the number you want, but it takes a few days, but
    you surely will get some nasty email.

    Quoting from the FAQ in another group:  The network is NOT a free
    resource, although it may look like that to some people.  It is far
    better to spend a few minutes of your own time researching an answer
    rather than broadcast your laziness and/or ineptitude to the net.

    Try (800) 555-1212 (it's free) to find if the bank maintains an 800
    number; many do.  If not, look at the area-code map in the front of
    your phone book to find the area code of the city where the bank is
    located; dial 1, the area code, and 555-1212.  Then call the bank
    and ask for an application.  Alternatively, larger public libraries
    have banking directories and can probably give you the information
    at the reference desk or by phone.


section 4. When you buy with a credit card
==========================================

Murphy's Law has free play in credit matters.  Here are some common
problems and how to avoid them (if you can) or resolve them (if you
must).

Q401. Is it better to pay by check or by credit card, as a rule?

    In general, it's better to use a credit card.  When you pay by
    credit card, the U.S.  Fair Credit Billing Act gives you a lot of
    protections (see section 5, "Billing errors and overcharges").
    These safeguards don't apply if you pay by check or by debit card.

    However, be aware that credit-card debt is about the most expensive
    legal kind there is.  With banks paying as low as 3% on savings (as
    of January 1992) but charging 19% or more on credit-card balances,
    it makes sense never to carry a balance past your grace period.

    Household budgeting is beyond the scope of this FAQ list.  But
    always bear in mind that if you're paying by check because your
    credit cards are maxed out, you may well be overextended and may
    want to think about deferring major purchases.  Even if your cards
    aren't maxed out, if you're carrying a balance from month to month
    you are paying dearly for the privilege.

Q402. When I make a purchase, can they ask for my address or phone
      number?

    This is a complicated question.  There are two possible sources of
    an answer:  Federal and state law, and the policies of the
    card-issuing organization.

    Law:  There is no Federal law on the subject.  According to Bankcard
    Holders of America, the laws of CA, DE, GA, MD, MN, NJ, NV, and NY
    prohibit recording personal information in connection with
    credit-card transactions.  Note the word "recording":  strictly
    interpreted, this means they can ask you to show a driver's license
    but can't write anything down from it.

    Policy:  According to letters from

        Director of Public Affairs                and
        Visa USA Inc.                        MasterCard International
        P.O. Box 8999                        888 Seventh Avenue
        San Francisco, CA  94128-8999        New York, NY 10106

    merchants are not allowed to refuse a sale made by Visa or
    MasterCard solely because the customer refuses to provide additional
    personal information.  According to Bankcard Holders of America, the
    same is true when you use your American Express card, but not when
    you use Discover.

    If merchants have "sufficient" reason to suspect you are not the
    authorized card holder, they may ask for further ID.  This exception
    rarely comes up in real life, and even if it does they must not
    write the information on the Amex, Visa, or MC charge slip.

Q403. If it's against the rules, why do merchants insist on address or
      phone number?

    Don't rule out ignorance:  many merchants don't know the rules.
    They may think (wrongly) that getting extra information from you
    will protect them somehow.  The truth is that if they follow the
    procedures of the credit-card company, they will get paid, period.

    On the other hand, some merchants are deliberately flouting the
    rules and depending on you to acquiesce.  Why?  Because they can
    sell your address or phone number, or add you to their in-house list
    of sales prospects.

    Don't accept the old wheeze about "in case there's a problem."  If
    the merchant follows proper procedures at the time of sale, there
    won't be.  If you leave your card behind they can send it to the the
    card issuer, who will return it to you.

Q404. What should I do when asked for personal information I don't want
      to give?

    See also "Is there any official document" and "Where should I report
    merchants who break the rules?" later in this section.

    If you don't see what all the fuss is about, please skip this Q.
    Note the key words, "information that I don't want to give."

    The most effective response is to ignore the request.  When they
    say, "I need your signature and phone," simply sign in the proper
    place and hand them the charge slip without your phone number.
    Don't comment on the request in any way.  More often than not, they
    won't follow up.

    If they do notice that you didn't put down the personal information,
    and ask you again for it, simply say quietly "I don't give that
    out." Almost all the time, the clerk writes down something like
    "refused" and that's the end of it.

    If they still insist, you have to decide how important it is to you
    to make a point.  If you don't much care, give them what they want
    so you can get back home.

    If (like me) you're a privacy fanatic, you can do one of several
    things.  (1) Point out that Visa and MasterCard rules don't allow
    them to require this information and wait to see what they do.
    Typically the clerk calls the manager to "authorize" the sale, which
    she does right away.  (2) Or you can say "Fine:  if you can't make
    the sale without this information, give me a credit slip and keep
    the merchandise." (Since the sale has already gone into the register
    they probably won't call your bluff.  They've never called mine.  If
    they do, get a written credit slip unless you're sure that the
    transaction has not already been processed electronically.)  (3) Or
    you can make up a phone number.  Please use one beginning with 555
    so that some innocent person doesn't get sales calls.  (4) Or, if
    you happen to know the number of the store it's always a nice touch
    to give them that.

    In all this, be firm but pleasant and quiet.  Don't raise your
    voice, but if this is important to you then don't let yourself be
    bullied either.  After all, this is America and you can almost
    always get equivalent merchandise from another store.

Q405. I tried to charge a $10 item but the merchant pointed to a sign
      "minimum charge $20."  Is this valid?

    Never for Visa and MasterCard; generally not for American Express.
    Discover explicitly allows the merchant to set a minimum purchase
    amount, according to email received by the previous editor.

    MC and Visa rules provide that a merchant may not require any
    minimum purchase amount.  This is the merchant's agreement with Visa
    or MasterCard; it is not a Federal law.  (On the other hand, if you
    insist on charging a 79-cent ball point pen, I hope you get four
    flat tires on the way home.)

    According to Bankcard Holders of America, if a merchant takes
    American Express and also Visa or MC, Amex doesn't let the merchant
    impose a minimum purchase on Amex users because that would
    discriminate against them.  Merchants who take Amex but neither Visa
    nor MC may impose minimum charges but Amex officially discourages
    the practice.

Q406. Can the merchant charge credit-card users more than cash customers
      for the same item?

    In a word, maybe.  In a few more words, probably, if the merchant
    goes about it the right way.

    The Federal Truth-in-Lending Act prohibited surcharges on credit-
    card purchases until 1984; since then, there has been no Federal law
    on that subject.  (Other provisions of the law are still in force.)
    The states of CA, CO, CT, FL, KS, MA, ME, NY, OK, and TX have laws
    against surcharges, according to Bankcard Holders of America.

    Discover allows surcharges on credit-card purchases, except in the
    above states.  Visa and MasterCard prohibit them.  American Express
    discourages them in general, and specifically prohibits them by
    merchants that also take MasterCard or Visa because Amex doesn't
    allow merchants to discriminate against it.

    There is a loophole:  merchants are allowed to give cash discounts.
    This means in practice that they can't charge you more than the
    labeled price if you pay by credit card, but they can charge you
    less if you pay cash.  Some companies announce (usually in tiny
    print in the catalog) that all prices "reflect cash discount" of x%
    so credit-card users must pay x% more than the stated price; this
    may be legal but it certainly violates the spirit of the law or the
    regulations.  I don't know about the "service fee" charged credit-
    card users for things like ordering tickets over the phone, but
    they're certainly not allowed to charge you a higher price in person
    than if you pay cash.

    The other loophole, according to Bankcard Holders of America (BHA),
    is this.  Certain government agencies are by law not allowed to pay
    "discount fees," which are the processing fee the bank charges
    merchants for handling credit-card slips.  Since the banks won't
    handle these for free, if your state lets you pay license feed by
    credit card you may well have to pay a surcharge for the privilege.
    However, BHA says that there are no exceptions for retail merchants.

Q407. I made a hotel reservation, and guaranteed it with my credit card.
      When I showed up, the hotel denied my reservation.  Have I any
      recourse?

    That depends.  Most hotels and motels (but not all) subscribe to the
    "Lodging Services Addendum" in their merchant agreement with Visa.
    If the hotel is one that participates, and they have no room for you
    when you arrive with a guaranteed reservation, their agreement with
    Visa requires them to:

    - Provide the cardholder with at least comparable accommodations for
      one night at another establishment.

    - Provide transportation for the cardholder to that establishment.

    - If requested, allow the cardholder to make a 3-minute local or
      long distance call.

    - If requested, forward all messages and calls for the cardholder to
      the alternate establishment.

    (source:  Lodging Services Addendum to Visa agreement of First Bank
    System, as quoted in a Usenet posting)

    However, your unsupported word is not exactly proof that you had a
    reservation.  Next time, write down the date and time you called,
    the rate you were quoted, which credit card you used for the
    guarantee, and the confirmation number.  (You may have to ask for a
    confirmation number.)  You need that info if there's a problem with
    your reservation, or if your plans change and you have to cancel.

    Some state laws may protect you when you have a guaranteed reserva-
    tion, whether you guaranteed it by a deposit or by credit card.

Q408. I paid by check, and the merchant wrote my credit-card number on
      the back.  If the check bounces, can the merchant charge my card?

    The answer to this one boils down to "There are two kinds of
    prevention, and an ounce of either is worth a pound of cure."

    First, in CA, DE, FL, GA, IA, IL, KS, MD, MN, ND, NJ, NV, NY, OH, VA,
    and WA it's illegal for merchants even to write your credit-card
    number on your check, so don't let them do it. (Note: In Illinois, 
    they can request a look at your card, but can't write the number on
    your check. They CAN write the type of card and expiration date)
    Source:  Bankcard Holders of America.  (I understand some banks are 
    tying check guarantees to their credit cards.  I don't know whether 
    that's legal in the above states, but it seems to be a bad idea.  If my 
    bank did that, I would question them closely about the potential for 
    fraud in using the same number for my credit cards as for check 
    guarantees.  Giving someone your credit- card number with your name 
    and address -- possibly even your phone number -- on a printed check is 
    an open invitation to scam artists.)

    Second, In states other than those listed above, the merchant has
    the legal right to refuse the sale if you refuse to give the
    informa- tion.  However, Visa, MasterCard, and American Express all
    forbid merchants to charge a credit-card account to cover a bounced
    check, or to use card numbers to locate a customer whose check
    bounces.  Since the merchant can't do anything legitimate with the
    card number, and since providing it makes you a possible victim of
    fraud, you should politely decline.  One possible compromise, if
    you're at an impasse, would be to show the card with your name on
    it, but to cover up all or part of the card number and to insist
    that no part of the number be written down.  Source:  Bankcard
    Holders of America.  (The situation may be different if your credit
    card is also a check-guarantee card; see the preceding paragraph for
    cautions.)

    Nearly 90% of bounced checks are due to consumers' math errors in
    balancing their checkbooks.  Despite this, the law in some states is
    that if you bounce a check it is assumed to be deliberate unless you
    can prove otherwise, and deliberately bouncing a check is a crime in
    every state.

    It's better never to get into this hassle than to deal with it after
    the fact.  If you've got credit cards, why pay by check at all?
    (See "Is it better to pay by check?" earlier in this section.)  If
    you do pay by check, don't give a credit-card number.  And if you
    bounce a check, don't make the merchant come to you but go to the
    merchant immediately to make things right.  Give the merchant a good
    check (probably a cashier's check) or cash for the amount of the
    purchase, and expect to pay a reasonable fee to the merchant in
    addition to your bank's fee.

Q409. Can mail-order merchants charge my card before they ship?

    According to Janet Hug of Visa USA, "a merchant is not permitted to
    bill ahead of time" except in case of a deposit or down payment that
    the customer agrees to.  (phone call from Visa USA, 12 May 1992)

    MasterCard said in a letter that a merchant can charge you before
    shipment only if s/he tells you and you agree to "the terms and
    conditions of the sale."

    American Express said the merchant can charge your card as soon as
    you give your account number; but if you receive the bill before the
    merchandise, call Amex customer service and you don't have to pay
    while they investigate.  (phone call to Amex, 16 May 1992)

Q410. Is there any official document that I can take with me to show
      merchants who violate the rules?

    Yes, the Bankcard Holders of America includes a wallet-sized
    Consumer Action Card with its pamphlet #14, "Consumer Rights at the
    Cash Register." For a copy, send $3 to BHA, 560 Herndon Parkway
    suite 120, Herndon VA 22070, or call (800) 553-8025 and ask for a
    catalog.  The card gives you something to show the merchant who
    won't believe your unsupported word.  The card has no legal force,
    but at least you don't look like you're making things up.  The
    pamphlet does the same thing, but an 11"x17" piece of paper gets
    kind of bulky folded in your wallet!

    Also see the pamphlets mentioned at the beginning of this file,
    which are issued by the Federal Reserve.  That should be official
    enough for any merchant.

Q411. Where should I report merchants who break the rules?

    If merchants violate any of the above laws, you can report them to
    your state's or city's consumer protection office or attorney
    general.  If they violate any rules of American Express, the company
    would like to know about it.  Report violations of Visa or
    MasterCard rules to the bank that issued your card; if the sale was
    completed, and you can also send a letter with a copy of the charge
    slip to the Visa or MC address given earlier in this section.

Q412. Does my payment have to reach the lender by the "due date" on the
      bill, or is it enough if I just mail it by the due date?

    That's a good question, and the answer varies.  The Uniform Commer-
    cial Code says that a bill is considered paid on the postmark date
    of the payment, but many states have different laws.  Even in states
    where the bill is considered legally paid on the postmark date, you
    may find that lenders will consider it paid on the date they process
    it.

    My personal practice is to avoid hassles by always mailing payment a
    reasonable time before the due date.  Even if I could push it
    legally, I don't believe the couple extra days of "float" is worth
    the aggravation of fighting with the lender over this point.

Q413. I have a checking or savings account at the same bank as my Visa
      or MasterCard.  Can the bank freeze my account or take money from
      it if I miss a payment on my credit card bill?

    Probably yes.  You should check your cardholder agreement.  The
    typical agreement gives the bank the right to take the money in any
    of your accounts with them if you are delinquent on your bill.  Even
    if there's not such a provision in your cardholder agreement, it's
    probably buried somewhere in the fine print that governs your
    deposit account.

    However, the Fair Credit Billing Act does not let them take any
    collection action at all if you have properly notified them of a
    dispute; see section 5, "Billing errors and overcharges."


section 5. Billing errors and overcharges
=========================================

The U.S. Fair Credit Billing Act governs credit billing, and gives savvy
consumers a lot of leverage when they are treated unfairly.

Q501. What kind of problems am I protected against?

    The Fair Credit Billing Act protects you from honest errors and
    outright fraud by merchants when you make the purchase through a
    bank credit card.  These include

    - billing errors
    - charges for goods ordered but never shipped
    - charges higher than agreed
    - charges for goods not shipped as ordered
    - charges for products that don't work as represented
    - charges for unsatisfactory services

    and similar kinds of problems.

Q502. There's an error on my bill.  What should I do?

    The instructions are printed on your bill, probably on the back.
    Just follow them.  The rules are simple:  if you report a problem in
    writing within 60 days of the billing date, the bank must
    investigate it and respond to you within 30 days.  While they are
    investigating, you don't have to pay the disputed amount or any
    finance charges on it.  If their investigation shows the item was
    correct, they can restore finance charges retroactively and you will
    have to pay them.

    The address to write to is on the bill.  Look for a heading like "In
    case of error" or "Send inquiries to."

    Some banks try to resolve problems over the phone; others insist
    that you write a letter.  If you decide to call before writing, make
    sure you note the date and time of the call, whom you talked to, and
    what s/he promised to do (if anything).  Then send a letter to the
    "Send inquiries to" address mentioning this information.  (Your
    letter should make clear that you are confirming a telephone
    conversation, so that the bank doesn't try twice to resolve the same
    problem.)

    If you resolve a problem by phone, but the bank doesn't follow
    through, the confirming letter that you sent will preserve your
    rights.

Q503. I got ripped off by the merchant.  What should I do?

    This is any situation listed at the beginning of this section,
    except billing errors.  Fortunately, the U.S.  Fair Credit Billing
    Act gives you strong protection if you used a credit card.  Because
    this comes up so frequently, and people are understandably emotional
    when they think they've been cheated, I've divided up the answer
    into several pieces that follow.

    The legal language is on the back of your bill, under "Special rule
    for credit card purchases."

Q504. Exactly which purchases qualify under the Fair Credit Billing Act?

    You are protected if all of the following are true:

    - The purchase was made with a credit card.  (If it was a debit
      card, the money is already gone from your account and the bank
      won't get involved.)

    - The amount charged is more than $50.  (The amount in dispute could
      be less, for example if you bought a $90 lamp but were billed
      $100.  The amount in dispute is $10.)

    - You made the purchase somewhere in your home state, or within 100
      miles of your mailing address.  (I am not an attorney, but my
      understanding is that if you are having goods shipped to you by
      mail or phone order, the place of purchase is the address you are
      having them shipped to.)

    If some of the above are not true, you are still protected if the
    credit-card company owns or operates the merchant, or the credit-
    card company mailed you the advertisement for what you bought.  In
    that case your purchase is covered by the rules no matter where you
    bought or how much you paid.

Q505. Will the bank get involved right away?

    No.  Under the law, first you must try "in good faith" to resolve
    the problem directly with the seller.

Q506. What does resolving a problem "in good faith" mean?

    "In good faith" is not defined in the law, but in practice it means
    that you act like a reasonable person and the merchant is expected
    to act reasonable too.

    At a minimum you should talk to the merchant's customer service
    department and send a follow-up letter.  You have to allow the
    merchant a reasonable time to respond.  What's reasonable?  Depends
    on circumstances.  Enough time for mail to go both ways, plus a
    couple of working days.

    "In good faith" also means that you act promptly.  Don't wait three
    months after the charge shows up on your bill to complain that you
    never got what you ordered.

    Back orders are a frequent problem.  If the merchant tells you the
    stuff is back ordered, you have the right to cancel the order.  (If
    it's mail order, they're supposed to give you a postage-paid reply
    card for this.) Then you can tell the merchant you don't want to
    wait and ask for the charge to be cancelled.  This may not happen
    the same day, but it should be reasonably prompt.  Wait a few days
    and call the bank to see if the credit has come through yet.

Q507. Any other hints for dealing with a problem merchant?

    Most important, remember that the person you are talking to is
    probably not the person who caused the problem.  Don't yell.  (In a
    letter, don't use lots of capital letters and don't run on at great
    length.) Don't sound crazy or make threats.

    Lots of good people work for bad companies.  Lots work for good
    companies that make an occasional mistake.  You may be lucky and
    deal with one of them.  If your approach is "You dirty rotten
    so-and-so" you probably won't get anywhere.  If your approach is
    "There's a problem here; can you help me?" you'll have a better
    chance.

    Be prepared with specific information before you call.  Have all the
    paper work in hand.  Make sure you can give the date ordered, what
    you ordered (item number and price), when you were promised the
    items, your credit card number, how much you were charged.  Be clear
    about exactly what you want.  A refund?  a replacement?  shipment by
    a certain date?  repairs?  Most people (not all) respond best if you
    tell them clearly and calmly what you want and if you sound
    reasonable.

Q508. I tried in good faith, but the merchant won't budge.  Can the bank
      help?

    Yes, and in fact the law says the bank _must_ help.  (The banks all
    know this, and most will be very helpful.  Don't expect a fight.)

    Write to the credit-card issuer and ask for a credit.  (This is
    called a chargeback, but you don't need to use the word.) Use the
    same address as for billing errors--see "There's an error in my
    bill," earlier in this section.  Make sure you give these important
    facts in the letter:

    - date you are writing the letter

    - your name and address, as they appear on the bill

    - your account number, and the statement date on the bill

    - Start with "I am writing about a problem with (company name).
      The transaction date was (mm/dd), the posting date was (mm/dd),
      and the transaction amount was $(amount)."

    - Then explain, clearly and briefly, what's wrong.

    - Next, state that you tried in good faith to resolve the problem
      directly with the merchant, but did not succeed.  List dates you
      made phone calls and what was said by the merchant; enclose
      photocopies of your letters to the merchant and its response.
      (Don't overload the bank with this.  You're showing that you acted
      in good faith; don't write a novel.)

Q509. What does the bank do when I ask for a chargeback?

    The bank will credit your account and charge the amount back to the
    merchant.  This must happen within one billing cycle, if you have
    done everything you were supposed to.  If the merchant doesn't
    respond, the amount is gone from your bill forever.

    If the merchant disputes the chargeback, the bank has to decide who
    is telling the truth.  If you don't like the decision, you can go to
    court or pursue other remedies that are beyond the scope of these
    FAQs.

Q510. What happens to finance charges on the disputed amount?

    You don't have to pay them while the bank is investigating.

    When the bank credits your account, they are also supposed to credit
    your account with any finance charges that were assessed on the
    disputed amount before you wrote to them.  They may or may not do
    this without further prompting from you.

    Again, if the disputed charge is later found to be correct, you will
    have to pay finance charges on it.

Q511. What if I paid my bill in full before I noticed a problem?

    Strictly speaking, the Fair Credit Billing Act says you may not have
    to pay "the remaining amount due." However, I and some other
    consumers have found that our banks aren't quite so picky.

    My advice (and remember I am not a lawyer) is to follow the standard
    procedures for disputing a charge and simply not to bring up the
    issue of whether you've already paid part or all of it.  Odds are,
    your bank won't raise that issue either.

    However...  It's best to examine bills carefully before you pay
    them.  If you question a charge on the 58th day, a month or more
    after you've already paid it, the bank is entitled to wonder if
    you're really acting "in good faith" as the law requires.

Q512. How do I avoid problems with unauthorized charges?

      From the Wall Street Journal, Friday, July 17, page C1

      "If you find that someone else has used your credit card number, 
       write to the card issuer and specify that an "unauthorized charge" 
       was made.  If you don't use those words, the issuer will most likely 
       treat the incident as a "billing error," says Ms. Butler of Bankcard 
       Holders.

       There's a big difference.  While a billing error must be reported 
       within 60 days, there are no time limits for reporting unauthorized 
       charges.  Most people don't get this straight: in fact, a brochure 
       prepared by the Federal Trade Commission and a pamphlet prepared by
       American Express incorrectly say that cardholders should report 
       unauthorized transactions as billing errors--and that they have only 
       60 days to do so.  A spokeswoman for American Express says its 
       information came from the FTC; a lawyer for the FTC says the agency 
       is now aware of the mistake.

       The most a cardholder will be liable for if someone used their card 
       is $50, the FTC lawyer says; if the card is not used in the 
       transaction, the cardholder won't have to pay any of it."


       I believe that last bit, about "if the card is not used," refers
       to people who find your number somewhere and place orders over the
       phone, where they give the number but don't have the actual card.]

       The article also has a useful sidebar (is that the word?) called
       "Preventing Crooks from Getting Your Numbers":

       "When traveling:
          "-- Ask for carbons of car rental agreement, and destroy.  Don't
              leave rental agreement in car where thieves can get it.
          "-- Shred travel itineraries and ticket receipts issued by 
              airlines and travel agents.
       "When at shops and restaurants:
          "-- Refuse to write address and phone number on credit slips, or
              credit card account numbers on checks.
          "-- Don't let clerk write your driver's license number on your
              check if it's the same as your Social Security number.
       "When using a calling card:
          "-- Don't use a personal identification number, or PIN, that's
              obvious, such as a birth date, work extension, or consecutive
              numbers.
          "-- Cover the phone with your body to prevent anyone from seeing 
              what you dial; if you must tell an operator your account 
              number, assume people are eavesdropping.
       "When at home:
          "-- Destroy all pre-approved credit card applications; when 
              cleaning files, shred old statements, pay stubs, and checks.
          "-- Don't give card numbers to callers who say you've won a prize.
          "-- If monthly statement doesn't arrive on time, call the issuer
              immediately."


section 6. Miscellaneous credit-card stuff
==========================================

Q601. What do the digits in my credit-card number mean?

    ANSI Standard X4.13-1983 answers this question for most national
    systems.  (Phone, gas, and department-store cards have their own
    numbering schemes.)  I have not read ANSI X4.13, but a correspondent
    was kind enough to provide excerpts, which follow.

    The first digit is the system:  3=T&E cards, 4=Visa, 5=MasterCard.
    (I have a Discover, and *my* card begins with a 6.  I do not know if
    this is uniformly true.) The structure of the card number varies by 
    system.

    - American Express starts with 37; Carte Blanche and Diners Club
      with 38.  For Amex, digits 3-4 are type and currency, digits 5-11
      are account number, digits 12-14 are card number within account,
      and digit 15 is a check digit.

    - Visa:  digits 2-6 are the bank number; digits 7-12 or 7-15 are the
      account number, and digit 13 or 16 is a check digit.

    - MasterCard:  digits 2-3, 2-4, 2-5, or 2-6 are the bank number,
      depending on whether digit 2 is a 1, 2, 3, or something else.  The
      digits after the bank number up through digit 15 are the account
      number, and digit 16 is a check digit.

Q602. I lost my credit card, or it was stolen.  What should I do?

    Call the issuer right away.  Somewhere in the papers that came with
    the card is an 800 number to call.  If you can't find those papers,
    look on a current bill and call the "inquiries" number there.  If
    you can't find a current bill, look up the bank's number in the
    phone book (or call Information) and they'll direct you how to make
    a report.

    The important thing is to move fast.  Once you have reported the
    card lost or stolen, you are not liable for any further charges on
    the account.

Q603. What is the 800 number for customer service?

    For Discover, it's (800) 347-2683, a/k/a 800-DISCOVEr.

    For American Express, it's (800) 528-4800 for green card, or for
    gold card (800) 327-2177.

    For Visa and MasterCard, each issuing bank handles service of its
    own customers.  First check the obvious:  the number may be printed
    somewhere in your bill, or on a page in the packet of stuff the card
    company sent you when you enrolled.  Or, if it's a local bank, check
    the white pages of your phone book.  If the bank is not local, try
    (800) 555-1212 (it's free) to find if the bank maintains an 800
    number; many do.  Alternatively, larger public libraries have
    banking directories and can probably give you the information at the
    reference desk or by phone.

Q604. Why was I turned down for a credit card?

    See sections 7, 8, and 9 in part 3 of this list, which deal with
    your credit history, credit reports, and credit bureaus.

Q605.  Should I give my credit-card number over the phone?

    One big question is:  did you call them or did they call you?  You
    should never give your credit-card number to anyone who calls you.
    Such a call is almost certainly a scam.  This is true even if
    (especially if) the caller claims to be from your card issuer.
    Anyone from the issuer who legitimately has your phone number also
    has the rest of your records, including your card number.

    If you're making a call in response to a postcard from some company
    you never heard of, be very wary.  There have been a lot of frauds
    reported where the victim gave a credit-card number and found lots
    of unauthorized charges on the next month's bill.  I'm sure that
    some of these "you've won a free trip, just give us your card number
    for the $149 processing fee" offers are legitimate:  but how can you
    tell over the phone?

    Of course, if you're calling an established mail-order company,
    giving them your card number is as safe as anything is these days!

Q606. How far can collection agencies go in bothering me?

    Credit-card debt, like any other debt, does not give your creditors
    license to harass you.  There is a Federal law, the Fair Debt
    Collection Practices Act; your state may afford you additional legal
    protections.  The U.S.  Fair Debt Collection Practices Act forbids
    these collection actions, among others:

    - violence or the threat of violence against persons or property;

    - obscene, profane, or abusive language;

    - repeated telephone calls with intent to "annoy, abuse, or harass",
      or calls or visits at inconvenient or unusual times (generally,
      before 8 am or after 9 pm);

    - visits at your workplace "if it is known the employer prohibits
      such contact";

    - falsely letting the debtor think that the collector is a
      government agent, or an attorney;

    - pretending that a document is from any source other than the true
      one;

    - a threat (overt or implied) that the debtor can go to jail or have
      property seized or wages attached, when that action would be
      illegal or the collector doesn't actually plan such action;

    - giving anyone any false credit information, including failing to
      mention that the debtor disputes a debt if that is true;

    - publicizing the debt;

    - a lie (overt or implied) about whether particular documents are or
      are not legal process.

    The FRB puts out a free pamphlet titled {The Fair Debt Collection
    Practices Act}.  For a copy, call (215) 574-6115 or write to Federal
    Reserve Bank of Philadelphia, Public Information/Publications, P O
    Box 66, Philadelphia PA 19105-0066.  See part 1 of this FAQ list to
    obtain a catalog of FRB publications.

(continued in part 3)
-- 
 The opinions expressed above are those of the author and not SPSS, Inc.
                        -------------------
     adams@spss.com                           Phone: (312) 329-3522
     Steve Adams                              Fax:   (312) 329-3558