What to do if your credit card bill has errors

MANILA, Philippines -- The first thing you should do when you get your credit card statement is to carefully check it against your records.

But what do you do when you find a "charge" that you didn't make?

ANC On The Money's resident financial adviser Salve Duplito said to contest your credit card billing, just call your bank's hotline and make a complaint.

The bank will investigate your complaint by looking at the signature used in the transaction. If the investigation showed there was indeed a fraudulent transaction or a system error, the bank will reverse the charges.

Alex Ilagan, executive director of the Credit Card Association of the Philippines, said most banks would temporarily reverse the charges as soon as you complain. This would mean you will not incur any interest and penalties while the investigation ins on-going.

Banks' investigations usually take some time. One possibility is another bank processed the transaction, which means your bank would need to coordinate with the other bank.

Duplito said the process can also become more complicated if the charges were incurred overseas.

She also reminded cardholders not to delay their complaints, or else the window where they can contest the charges will close.

"You must call the bank within 2 weeks after the statement date. Most cardholders get their billing statement a week after the statement date, so you only have effectively around a week to make sure your statement is accurate," she said.

Duplito said she did an informal survey and found most people don't check their credit card billing statements.

"What's alarming about this is the anecdotal increase in credit card fraud recently. If you were victimized by fraudsters and you didn't check your billing, you just keep on paying for their shopping sprees and not know it," she said.

Ilagan said it is every cardholder's responsibility to double check their bills and correct tghem if there are any errors.

He said the most common problem of cardholders is failing to recognize the company name on credit card bills. Some merchants use a different company name in billing statements, which add to the confusion.

Duplito suggested cardholders create a "budget tracking system" to keep track of their expenses, including credit card transactions. This will make it easy to double-check the accuracy of your billing statement at the end of the month.

However, it's a different case if you lose your credit card and charges were made before you discovered this and reported it to the credit card company.

"Card companies must simply waive charges for all errors and fraudulent transactions even before a card is reported as stolen. After all, they reversecharges from a card victimized via skimming. That's almost teh same as somebody stealing your card from you physically," Duplito said.

Most of these problems are likely to lessen when credit card companies shift to a chip-based or EMV cards, but this will happend in 2017.

She noted hybrid-EMV cards are still be vulnerable to fraud, so the only way to go is purely EMV cards.

"Closely watch which banks and merchants truly walk the talk of valuing their customers. Those are the companies that will put their money where their mouths are and be the first to shift to a purely chip-based card," she said.

source: www.abs-cbnnews.com

What are the top mistakes in using credit cards?

MANILA, Philippines – Owning a credit card will not translate to more debt if you are using it wisely.

Financial analyst Ralph Ngo said one of the biggest mistakes of credit card users is the mindset that it can be used like free money.

He said most users find themselves in debt because they only pay the minimum amount required every month.

“People use their credit cards but they don’t have the capacity to pay in full. Worse, they just pay the minimum amount, that’s a no-no,” he said on ANC’s “On The Money.”

But if you’re going to pay the full amount due monthly, then what is the use of a credit card?

According to Ngo, it is best to only use it for emergencies.

“You can use your credit card if, let’s say, there is an emergency and it is understandable if you can’t pay it in full. But at least have a plan on how you can pay it sooner than facing the consequences or the burden of paying the interest only,” he said.

Not paying the full amount will incur big interest charges, which will eventually increase through time.

A credit card bill with P100,000 due, for instance, will have an interest per month of P3,500 due to monthly interest rate of 3.5%.

The minimum amount due for this card will amount to P5,000, which means only P1,500 go to the principal amount of P100,000, while P3,500 go to interest charges.

Paying the minimum amount regularly will also mean a negative rating on your credit record.

“It’s easy for us to spend but difficult to pay,” Ngo said.

He said another common mistake is neglecting to pay on time.

Most credit card companies charge late payment fees, so it is important to have the due date noted down in your calendar, said Ngo.

“Finance charges can go as high as 7.5%, and even if you call the credit card company to argue, they won’t listen,” he said.

To avoid these mistakes, Ngo said to think long and hard before purchasing something using your credit card.

“Before spending, think of the reason why you are spending. Is it really worth it, is there a need for you to spend or is it just a luxury or something you spotted at a mall?” he said.

If you have multiple cards, Ngo said it would be best to keep the other cards at home and leave in your wallet the card that you will use for that period.

To avoid incurring debt due to multiple charges, a person should only have a maximum of 2 to 3 credit cards.

Doing a balance transfer is also a viable option, but only if the bank is offering the lowest balance transfer rate.

Ngo noted that if you are expecting to receive money in the next month or so, it is still better to pay off what you can now and the debt in full when the money comes in rather doing a balance transfer.

source: www.abs-cbnnews.com