The debate over which form of payment is the best for consumers has been going on for years. Paying with a debit or prepaid card is touted by many as the safest and most convenient way to pay without creating debt. Others prefer the simplicity of using cash, personal checks, money orders, etc. But if you examine the benefits of each form of payment, you’ll see that credit cards offer the most advantages and should be at the top of everyone’s payment list. If used wisely, credit cards provide a level of security and protection that you’ll find nowhere else.
The Most Under Appreciated Benefit
Credit cards offer a wide range of perks to cardholders; from the most obvious – credit card reward programs – to car rental insurance and extended warranty coverage. But there’s one benefit that makes using a credit card worth it in almost every situation – credit card purchase protection. This free coverage protects eligible purchases against accidental damage or theft, in addition to the benefit of price and return protection.
Most retailers already offer return policies that meet the needs of most consumers when a defective or unwanted item needs to be returned, but in recent years many have tightened their policies to help prevent return fraud.
By adding restrictions, limiting return rights, charging restocking fees and shortening return periods, it can be extremely difficult or even impossible to resolve some disputed purchases, especially if you don’t return the item right away or unauthorized purchases have been made to your account. Dealing with a store that has a questionable or limited return policy puts you at their mercy unless you have additional coverage provided by credit card companies. Protect large ticket items by paying with a credit card and you’ll add an extra level of security you can count on.
How Purchase Protection / Charge Backs Work
When you have a problem and file a dispute with your credit card company, purchase protection will ensure that your credit card is refunded immediately. Often referred to as a “charge back,” the merchant repays the original purchase price, and often an additional fee. The process of disputing a purchase and requesting an intervention by your bank is outlined in the terms of your credit card agreement, but it’s usually as easy as making a phone call.
Situations that may require a charge-back include:
- Failure to recognize a transaction on your monthly credit card statement
- Being charged multiple times for the same product or service
- An overcharge for a product or service
- Dissatisfaction with an item or service provided by a vendor
- Unauthorized charges to your account
Credit Card Purchase Protection in Action
Before you call your credit card company to request a charge-back, work with the retailer to resolve the issue first. Contact their customer service department and work up the chain of command if, necessary. Many store employees do not have the authority to discuss credit card purchases directly with customers.
If you can’t make a connection in person or over the phone, write a detailed letter explaining your request. If you don’t get the results you’re looking for, now is the time to create a dispute with your credit card company and take advantage of your purchase protection. The credit card issuer will then ask the merchant to respond to your complaint. If the merchant cannot prove that they provided a satisfactory product or service, or they fail to respond to your dispute at all, your credit card company is obligated by the rules outlined in the Fair Credit Act to refund the disputed amount back to your account.
Credit card purchase protection is just one of benefits you’ll gain by using a credit card; especially for large purchases. Although they’re not ideal for everyone, when used responsibly, a credit card will provide an extra level of security and protect you from fraudsters, shady vendors and unscrupulous retailers.
* Looking for a new credit card? Compare all of the best credit card offers→.