Credit Cards

Credit Cards are everywhere. They make buying gas at our local corner store convenient and making bids on internet auctions easy.

Behind each transaction, though, there are risks. To reduce your risk, you need to do two things.

1. Understand the terms established by your credit issuers and;
2. Know how to protect your credit card numbers.

Know Your Credit Terms. If you have questions about your credit card, consult your credit card agreement. Even though it can be long, be sure to read it thoroughly.

While Texas law provides for a limit on credit card interest, this applies only if the bank issuing the card is chartered in Texas. Most credit card companies today are based in states that do not impose such limits, and under federal law are able to charge substantially more, even to consumers who reside outside states with high or no interest caps.

Many triggers can raise your interest rate substantially. Some are more apparent than others.

Make sure you pay on time and do not exceed your credit limit. Being one day late on a payment or a few dollars over your limit can trigger a rate increase.

Consumers should also be aware that many credit card companies regularly monitor their overall creditworthiness. This means they can raise your interest rate if you are delinquent in paying a debt unrelated to your card, such as an auto loan or mortgage. Furthermore, most credit card agreements allow the issuer to periodically change the rate at its discretion.

Credit card companies are also generally allowed to change other terms, including late fees and the minimum amount due.

Keep a close watch on your rate and other terms in each statement. They can change even if you've been making timely payments on your card and other outstanding debt. Contact the credit card company if you see a change that you don't like.

Protect Your Credit Card Numbers

Thieves can steal your credit card numbers many ways. Taking some simple steps will help thwart them.

First, consider removing your name from the marketing lists of the four major credit reporting bureaus. You can "opt-out" from these lists by phone or online. This should reduce the number of pre-approved credit card offers you receive. Other steps to help safeguard your cards are:

• Only carry the cards you need.
• Do not keep PIN numbers in your wallet or purse.
• Never let a clerk put your card where you can't see it. Dishonest clerks can use hand-held recorders to swipe your card and capture its information.
• Make sure the receipt amount is correct.
• Draw a line through any fields you leave blank on the receipt.
• Never give your credit card number over the phone unless you made the call. Legitimate companies will never call to "verify" your credit card number.
• Never reply to an unsolicited email with your credit card number. Again, no legitimate business will ask you to "verify" your credit card number. This is a common scam known as phishing.
• When shopping online use a secure server. After you arrive at the page that asks for your credit card, look at the top area of your browser. The website should begin with "https://" rather than "http://". The 's' indicates a secure server.
• Check your credit card statements and verify that each bill is legitimate. It is particularly important with ATM cards, because you may be liable for all charges if you do not report the loss quickly.
• Make a list of your cards, account numbers, and phone numbers of the card companies. Keep this in a safe place, separate from your cards. If your purse or wallet is stolen, you can use this to notify your credit card companies.

State law requires businesses to conceal all but the final four digits of the account number on all credit or debit card receipts. The law does make an exception for transactions in which the sole means of recording the card number is writing it out by hand or an imprint or copy of the card. Merchants are allowed to keep a copy of the receipt with the full credit card number.

Business owners who continue to print the entire credit or debit account number on consumer receipts may be penalized up to $500 per month of noncompliance. Please file a consumer complaint with our office if you believe a merchant violated this law.

If Theft Occurs

If you suspect your credit card number may be compromised, contact your credit card company right away.

Federal Reserve regulations protect you if someone uses your credit card without permission. You are not liable for any charges made after you notify your bank or credit card company that your card was lost or stolen. If charges are made before you give notice, you are only liable for $50 of those charges.

If you have more than one card lost or stolen, even the $50 limit can result in significant losses so promptly give notice of theft or loss. If you dispute your liability for an unauthorized charge, remember that under federal law, the credit card company has the burden of proving that you authorized the charges or that any unauthorized charges were made before you gave notice. Disputes over credit card bills must be in writing.

The regulations that protect you from fraudulent use of ATM and debit cards are not as generous. As with credit cards, you are not liable for any charges made after you report the loss or theft of your card. However, the notice requirements are stricter. You are only protected by the $50 limit on unauthorized charges if you report the loss of the ATM card within two business days after the day you learn of the loss or theft. If you wait longer than two business days, you can be liable for up to $500 in charges. Once an unauthorized charge has been reported to you on your bank statement, you can be liable for the full amount if you do not report the charge within 60 days of the date the statement was sent to you.

Another step you can take to protect your credit is to place a credit alert or freeze on your file with the major credit reporting bureaus. You can contact them at:

EXPERIAN
P. O. Box 2104
Allen, TX 75013-2104
(888) 397-3742
www.experian.com

EQUIFAX
P. O. Box 740241
Atlanta, GA 30374-0241
(800) 685-1111 (order report)
(800) 525-6285 (report fraud)
www.equifax.com

TRANS UNION
P .O. Box 2000
Chester, PA 19022-2000
(800) 888-4213 (request report)
(800) 680-7289 (report fraud)
www.transunion.com

It is also a good idea to review your credit report for suspicious activity. You can order a free credit report from each of the above credit reporting bureaus at www.annualcreditreport.com

Charging Extra For Credit Card Use

In Texas, a business can not penalize you for paying with a credit card. Businesses that add a surcharge to those who pay by credit card might be violating provisions of the Texas Finance Code. However, businesses can discount the regular retail price of an item for consumers who pay cash. If you believe a business is charging extra for credit card purchases, please a file a consumer complaint with our office.

Credit card fees can be charged by government entities, such as for the payment of property taxes or other fees required by government agencies.

Filing a Complaint

If you have a complaint against a credit card company, you can file a consumer complaint with our office and with the agency that regulates the financial institution which issued your credit card. Many credit cards are issued by national banks which are regulated by the Office of the Comptroller of the Currency.

In addition, the Federal Reserve System supervises state-chartered member banks of the Federal Reserve System.