FTC Consumer Alert

Federal Trade Commission Bureau of Consumer Protection Division of Consumer & Business Education

Using a Credit Card: 

Your Rights and Responsibilities 

Regardless of whether you’re using your credit card to buy a laptop or laundry soap, you have rights 

and responsibilities under the law. The Federal Trade Commission, the nation’s consumer protection 

agency, says getting a good grip on the safe use of credit cards can help you avoid a credit calamity. 

Prompt Credit for Payment. It’s important to pay your bill on time. If you don’t, you may have to 

pay late fees and additional finance charges. 

When you make a payment, your card issuer generally must credit your account the day they receive 

it, but there are exceptions. 

•	 Your issuer is not required to credit your payment that day if you don’t make the payment

according to it’s requirements. For example, your issuer can set a reasonable cut-off hour for

your payment to be received for crediting on that day. 

•	 Your issuer can require that you provide an account number or payment stub with your

payment. 

•	 Your issuer doesn’t have to credit your account the day your payment is received if a delay

won’t result in a charge to you. 

To help avoid additional charges, follow your issuer’s payment instructions. Sending your payment 

to the wrong address – even if the payment is received by some office of the issuer – could delay 

crediting your account for up to five days. If you pay by mail and misplace your payment envelope, 

look for the payment address on your billing statement or call the issuer for the correct address. If you 

pay your bill online, set up a reminder a week or so before the bill is due to be sure you pay on time 

and to the proper electronic address. Set up a return electronic notice, showing the company received 

your online payment. No matter what method you use, check your billing statement to be sure you 

have the right due date (and the time of day it must be received) for each account.

Automatic debiting to your bank account can be a convenient way to pay bills in a timely way, but 

there are considerations. For example, the amount due each month could vary, and you would need 

sufficient funds in your bank account to pay it; otherwise, you could overdraw your account, be 

charged for insufficient funds, and damage your credit rating. Under federal law, you cannot be 

required to use automatic debits from your bank account to repay an extension of credit.
If you decide to set up automatic debits, the creditor must:

•	 disclose the terms of the transfers in a clear and understandable way;

•	 have you sign a written or electronic authorization; and

•	 give you a copy of the authorization, disclosing the terms.

Refunds of Credit Balances. If you have a credit balance on your account, perhaps because you 

returned an item, you can keep the credit on your account or write your issuer for a refund if the 

amount is more than a dollar. Your card issuer must send you a refund within seven business days of

receiving your request. If you don’t ask for a refund and you don’t make any other purchases for more

than six months, the issuer must make a good faith effort to send you a refund.

Errors on Your Bill. Card issuers must follow rules for correcting billing errors promptly. They must 

send you a statement outlining these rules when you open an account, and then, at least once a year 

while your account is open. In fact, many creditors routinely include a summary of these rights with 

your billing statements. 

If you find a mistake on your bill, you can dispute the charge and withhold payment on that amount 

while the charge is being investigated. The error might be a charge for the wrong amount, for 

something you didn’t accept, or for an item that wasn’t delivered as agreed. You still have to pay any

part of the bill that’s not in dispute, including finance and other charges not related to the disputed 

amount.

To dispute a charge:

•	 Write to the issuer at the address indicated on your statement for “billing inquiries.” Include

your name, address, account number, and a description of the error. 

•	 Send your letter as soon as possible. It must reach the issuer within 60 days after the issuer

mailed you the first bill with the error. 

The issuer must acknowledge your complaint in writing within 30 days of receiving it, unless they’ve

resolved the problem. The issuer must resolve your dispute within two billing cycles or 90 days,

whichever is later. 

Unauthorized Charges. If your credit card is used without your permission, you can be held 

responsible for up to $50. If you report the loss before the card is used, you can’t be held responsible

for any unauthorized charges. But if a thief uses your card before you report it missing, the most you

will owe for unauthorized charges is $50. If the thief uses your card number – but not your card – you

are not liable for the unauthorized charges.

To minimize your liability, report a loss as soon as possible. Some issuers have 24-hour toll-free

telephone numbers to accept emergency information. It’s a good idea to follow-up with a letter:

include your account number, the date you noticed your card missing, and the date you reported the 

loss. Keep a copy of the letter for your files.
1-877-FTC-HELP FOR THE CONSUMER

FEDERAL TRADE COMMISSION ftc.gov

March 2009

Disputes about Merchandise or Services. You generally can dispute charges for unsatisfactory goods

or services (including issues about the quality of an item) if you made a good faith effort to resolve the

dispute with the seller, if the charge is for more than $50, or if you made the purchase in your home

state or within 100 miles of your current billing address. In addition to disputing the charge with the

issuer, you may want to consider filing an action against the merchant in small claims court.

Tips for Using Your Credit Card Safely 

•	 Never lend your card to anyone.

•	 Never sign a blank charge slip. Draw lines through blank spaces on charge slips above the total

so no one can change the amount. 

•	 Never put your account number on the outside of an envelope or a postcard.	

•	 Be cautious about disclosing your account number on the telephone or online unless you know

the person or website you’re dealing with represents a reputable company.

•	 When you go out, carry only the cards you expect to use that day. If your wallet or purse is

lost or stolen, that minimizes your loss and the resulting headache.

•	 Keep your receipts so you can reconcile the charges on your bill.

•	 Keep a record – in a safe place separate from your cards – of your account numbers, expiration

dates, and phone numbers of each creditor to report a loss quickly.

To learn more about credit issues, visit ftc.gov/credit. 

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in 

the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a 

complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTCHELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the

Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil 

and criminal law enforcement agencies in the U.S. and abroad.