Use this FREE information to learn about the "hidden costs" buried in the credit card check disclosure statement. Here we discuss the key points of a typical credit disclosure statement and how breaking just one of these hidden rules can cost you hundreds of dollars in interest charges and over the limit fees.

Knowledge is power!

1. Check Uses
2. Limitations
3. Periodic Statements
4. Returned Check Fees
5. Stop Payment
6. Surrender of Checks
7. Your Billing Rights
8. Notification in Case of Errors or Questions about a Bill
9. Your Rights and Responsibilities after receiving a written notice

Up 1. CHECK USES

Text: I can use the Credit Card (“Checks” or “Check”) to purchase goods and services or to obtain cash up to the amount of my credit limit. Use of the Checks is a cash advance on my Credit Card Account Account.

Key Points/Concerns

The Statement, "Use of the Checks is a cash advance" means that

• you will be charged any applicable cash advance fees outlined in your credit card Disclosure Statement
• the interest charged on cash advances is higher than on purchases
• if you go over your credit limit you may be assessed an over-limit fee

Up 2. LIMITATIONS

Text: You are not required to honor a Check that will cause me to exceed my credit limit. You will not pay a Check if at the time the Check is presented, I am in default or you have suspended, terminated or canceled the Account. Each Check must be in the form you have issued to me. Checks may be used only by the person(s) whose name(s) is/are printed on the Check. I am responsible for all authorized use of the Checks. I may not use the Checks to pay any amount which I owe you pursuant to this Agreement and Disclosure Statement.

Key Points/Concerns

The statement, "I am responsible for all authorized use of the Checks" means that if you allow any other person to use these checks then, you accept responsibility for the debt regardless of what happens after the checks are used (divorce, separation etc.)

The statement, "I may not use the Checks to pay any amount which I owe you", means that if you owe $500 you cannot send them a $500 check they issued you, to pay the debt.

Note 1: This statement is designed to stop people, who cannot make the minimum payments or no payments, from increasing their balance while appearing to make a payment without actually paying anything on the debt!

Note 2: This term does not exclude you from cashing the check, (as long as you are not in default or at your credit limit) depositing it, and then sending them a personal check to make a payment!

Up 3. PERIODIC STATEMENTS

Text: My periodic statement will show me an itemization of the Checks posted to the Account during the billing cycle. Checks paid by you will not be returned to me with my periodic statement.

Key Points/Concerns

Keep accurate records (receipts) because they do not return the checks. Then, always look closely at the periodic statement comparing your records to the statement. If they match great, if they don't, tell the company immediately to protect your credit rights.

Up 4. RETURNED CHECK FEE

Text: You will charge a fee of $15.00 per returned Check which will be billed to the Account, if my Check cannot be paid.

Key Points/Concerns

First, the $15 fee is automatically charged to your account!

Second, this is considered a fee and therefore must be paid before your payment is applied toward your balance! So if you send a $50 minimum payment, only $35 goes toward the balance!

Third this is the average fee assessed but it can run as high as $30!

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Up 5. STOP PAYMENT

Text: Provided such request is timely, so that you shall have a reasonable opportunity to act upon it under your rules, I may order stop payment on a Check drawn on the Account, other than one that has been guaranteed. In the event of an oral stop payment order, the order shall be valid for only fourteen (14) days thereafter unless confirmed in writing. Written stop payment orders will remain in effect only twelve (12) months unless renewed in writing. I have the burden of establishing the fact and amount of loss resulting from payment contrary to a binding stop payment order. When I place a stop payment on my Check(s), you will bill my Account a fee of $15.00 per Check.

Key Points/Concerns

The statement, "other than one that has been guaranteed" means that when you present a credit card check and the merchant calls for approval, then the amount is "guaranteed" and therefore payment cannot be stopped!

The statement, "In the event of an oral stop payment order . . . unless confirmed in writing" means that you must send a stop-payment follow-up letter that reaches them (as opposed to just being dated) within 14 days. Notice it means calendar days not business days!

The statement, "stop payment orders will remain in effect only twelve (12) months" means that, if you presented a credit card check to a merchant or individual and they hold the check and then after twelve months try to cash it, they could be successful!

The statement, "I have the burden of establishing the fact and amount of loss" means that if somehow the check is cashed after a valid stop order is in place, you still have to prove you incurred a loss before they will credit your account!

The statement, "a fee of $15.00 per Check" should alert you that since it is a fee, it must be paid before any payment is applied toward the balance! For instance, sending a $50 minimum payment results in only $35 going toward the balance!

Up 6. SURRENDER OF CHECKS

Text: The Checks are your property. You reserve the right to revoke them at any time. I agree to return them at your request.

Key Points/Concerns

Self Explanatory

Up 7. YOUR BILLING RIGHTS

Text: (Keep this Notice for future use.) This notice contains important information about my rights and responsibilities under the Fair Credit Billing Act.

Up 8. Notification in Case of Errors or Questions about a Bill

Text: If I think my periodic statement is wrong, or if I need more information about a transaction on my periodic statement, I must write to you on a separate sheet at the address listed on my periodic statement. I should write to you as soon as possible. You must hear from me no later than sixty (60) days after you sent me the first periodic statement on which the error or problem appeared. I can telephone you, but doing so will not preserve my rights.

Key Points/Concerns

The statement, "I must write to you on a separate sheet at the address listed on my periodic statement" contains two important points;

1. They will not accept the bill back with the error highlighted or a note wrote on it, nor will they accept a note written on your check. You must inform the company a "separate sheet of paper"!
2. Do not make the mistake of sending this notification letter to the same address where you send your payment! Look for the correct address on the back of periodic statement somewhere in the fine print.

The statement, "I can telephone you, but doing so will not preserve my rights" means that you must follow up all phone calls with a written notification within the 60 day time limit or you forfeit your rights.

Use this Sample Letter for credit card billing errors!

Up 9. Your Rights and Responsibilities after receiving a written notice.

Text: You must acknowledge my letter within thirty (30) days, unless you have corrected the error by then. Within ninety (90) days, you must either correct the error or explain why you believe the periodic statement was correct.

Discussion: Pay attention to the time frame here because Finance Charges still apply and accrue so, if you loose the dispute, these finance charges will be added to your account. Try to resolve the issue as quick as possible.

Text: After you receive my letter, you cannot try to collect any amount I question, or report me as delinquent. You can continue to bill me for the amount I question, including FINANCE CHARGES, and you can apply any unpaid amount against my credit limit.

Discussion: This statement contains four important points.

1. Although they cannot collect the amount in question, they expect payment on any undisputed amounts so minimum payments are still required!
   
   
2. Not reporting you as delinquent is an important protection for you! However, any amount not disputed but past due can be reported to credit bureaus!
   
   
3. Even though you have disputed the bill, remember that finance charges are accruing and once the outcome is determined, the amount already billed becomes due immediately!
   
   
4. The disputed amount counts toward your credit limit so do not charge over your limit because then over-limit fees apply!

Text: I do not have to pay any questioned amount while you are investigating, but I am still obligated to pay the parts of the periodic statement that are not in question.

Discussion: Remember the order in which your payment is applied:

1. late charges, if any;
2. unpaid periodic FINANCE CHARGE due on both cash advances and purchases;
3. fees;
4. outstanding principal balances of cash advances and purchases previously billed; and
5. current cash advances and purchases.

It's a good bet that you are disputing the most current charges so, a minimum payment is still required!

Text: If you find that you made a mistake on my periodic statement, I will not have to pay any FINANCE CHARGES related to any questioned amount. If you did not make a mistake, I may have to pay FINANCE CHARGES, and I will have to make up any missed payments on the questioned amount. In either case, you will send me a statement of the amount I owe and the date that it is due.

Discussion: The second half of the statement means that in addition to your next minimum payment, you will owe the amount of any missed payments including accrued finance charges. Most companies only give you 30 days to pay.

Text: If I fail to pay the amount that you think I owe, you may report me as delinquent. However, if your explanation does not satisfy me and I write to you within ten (10) days telling you that I still refuse to pay, you must tell anyone you report me to that I have a question about my statement. And, you must tell me the name of anyone you reported me to. You must tell anyone you reported me to that the matter has been settled between us when it finally is.

Discussion: This contains three important points:

1. Once the company sends an explanation of why they believe the bill is correct, the burden of proof falls on you again and this time you only have 10 calendar days to react. Also, your account can now be reported as delinquent with a note attached saying it is in dispute!
   
   
2. They must inform you of who they reported your delinquent account too - insist on receiving this information!
   
   
3. When the matter is settled, they must report this fact to whomever they reported your account to - again insist on this because delinquent accounts have a way of coming back to haunt you years later!.

Text: If you do not follow these rules, you cannot collect the first $50.00 of the questioned amount, even if my periodic statement was correct.

Discussion: This sounds good but in order to collect the money, you must provide absolutely accurate records that they failed to follow the rules. This means you must track all statements, correspondence, phone calls etc.

Rich's Enterprises, L.L.C., Prattville, Alabama
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