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Credit Cards

Find out your rights when it comes to credit cards and how to choose the right one.

Choose a Credit Card

When applying for credit cards, it’s important to shop around. There are many credit cards with various features, but there is no one single best card. When you’re trying to find the credit card that best suits your needs, consider these factors:

  • Annual Percentage Rate (APR) - The APR is a measure of the cost of credit, expressed as a yearly interest rate. If the interest rate is variable, ask how it is determined and when it can change.
  • Periodic Rate - This is the interest rate used to determine the finance charge on your balance each billing period.
  • Annual Fee - While some credit cards have no annual fee, others expect you to pay an amount each year for being a cardholder.
  • Rewards Programs - Can you earn points for flights, hotel stays, and gift certificates to your favorite retailers? Use online tools to find the card that offers the best rewards for you.
  • Grace Period - This is the number of days you have to pay your bill in full before finance charges start. Without this period, you may have to pay interest from the date you use your card or when the purchase is posted to your account.
  • Finance Charges - Most lenders calculate finance charges using an average daily account balance: the average of what you owed each day in the billing cycle. Look for offers that use an adjusted balance, which subtracts your monthly payment from your beginning balance. Avoid offers that use the previous balance in calculating what you owe; this method has the highest finance charge. Also, find out if there is a minimum finance charge.
  • Other Fees - Are there fees if you get a cash advance, make a late payment, or go over your credit limit? Some credit card companies also charge a monthly fee. Be careful: sometimes companies may also try to upsell by offering other services such as credit protection, insurance, or debt coverage that you may not need.
  • Terms and Conditions - Read the agreement before you apply for the card to make sure that you agree with the requirements, such as mandatory arbitration or repossession clauses.
  • Security Features - Does the card allow you to switch it on or off, receive fraud alerts, or text messages immediately after purchases? 
  • Chip and PIN - Does the card issuer offer chip and PIN security features that use an embedded chip instead of a magnetic strip? You may need this card type if you travel internationally. In 2015, merchants and businesses in the U.S. were required to add in-store technology and processing systems so you can make a purchase using a chip card.

The Fair Credit and Charge Card Disclosure Act requires credit and charge card issuers to include all of the information above on credit applications.

Credit Card Guides

Get tips to help you choose and use a credit card:

  • Guide to Credit Cards - Learn about important things to consider when choosing a credit card, such as customer service, transaction fees, and more.
  • How to Shop for a Credit Card - Find out how to plan for, shop around, and get a credit card that best suits your needs.
  • Using a Credit Card - Get the basics on using your credit card, including refunds, errors, disputes, unauthorized charges, and security.

Credit Card Laws

Credit card regulation protects you from unfair practices, gives you the right to dispute charges on your credit card, and allows you to file a complaint with your credit card company.

Credit Cardholders Rights

Often called the Credit Cardholders Bill of Rights, the Credit CARD Act protects you in two ways:

  • Fairness - By prohibiting certain practices that are unfair or abusive, such as hiking up the rate on an existing balance, or allowing you to go overlimit and then imposing an overlimit fee
  • Transparency - Making the rates and fees on credit cards more transparent, so you can understand how much you’re paying for your credit card

Dispute a Credit Card Charge

Under the Fair Credit Billing Act, you have the right to dispute charges on your credit card that you didn't make or are incorrect, or for goods or services you didn't receive. To dispute a charge, follow these guidelines:

  • Send a letter to the creditor within 60 days of the postmark of the bill with the disputed charge.
  • Include your name and account number, the date and amount of the disputed charge, and a complete explanation of why you’re disputing the charge.
  • To ensure it is received, send your letter by certified mail with a return receipt requested.
  • The creditor or card issuer must acknowledge your letter in writing within 30 days of receiving it and conduct an investigation within 90 days. You do not have to pay the amount in dispute during the investigation.
  • If there was an error, the creditor must credit your account and remove any fees.
  • If the bill is correct, you must be told in writing what you owe and why. You must pay it along with any related finance charges.

File a Complaint

For problems with your credit card company, call the number on the back of your card or submit a complaint to the CFPB. This includes issues with managing your credit card account, billing disputes, changes to your annual percentage rate (APR), and unauthorized transactions. If you can’t resolve the issue, ask for the name, address, and phone number of the card company's regulatory agency.

Credit Card Protections

Did you know that your credit card may offer you other protections that are not typically advertised?

When using your credit card for travel purchases, your credit card issuer may offer you travel insurance in certain situations:

  • Your trip is delayed.
  • You have to cancel your trip because you or a family member becomes ill.
  • Your luggage gets lost during travel.

If you rent a car, you may be offered auto insurance coverage as part of the rental. Some credit card networks even offer return assistance programs that extend the window for returning unused merchandise. Keep in mind: the rules vary between cards and the issuers.

Find your credit card agreement by checking the CFPB database to learn about special protections your card offers. Agreements also cover the fees, features, terms, and conditions of your credit card. Learn more by reviewing a sample credit card agreement.

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Last Updated: April 11, 2019