Credit can be a mystery, so it’s no wonder so many consumers run into trouble. And when they do, their credit rating can take a beating. In The Wall Street Journal article “Dirty secrets of your debit and credit cards,” author Jeanette Pavini touches on the ins and outs of credit card issuers’ policies and the common missteps people make.
“While credit and debit cards certainly make life convenient, it’s important to understand their deepest secrets so you can avoid making mistakes that cost you money,” she says.
Pavini focuses on these four areas:
- Overdraft protection. It’s convenient – but it can also cost you an arm and a leg. Large banks charged, on average, a $34 fee each time the service was used in 2012. That adds up, depending on how closely you monitor your balance. The Consumer Financial Protection Bureau found consumers who previously used overdraft protection saved more than $450 per account after opting out.
- Authorization holds. Some businesses like restaurants and gas stations add these to your cards at the time of a purchase. The hold is for more than the amount spent and is intended to ensure you have adequate funds in your account. What that means for you is that even if you have enough money for a purchase, your card could still be declined when you don’t have enough to cover the hold.
- Credit vs. debit. Choose credit. “If you go with credit you typically get the same security protections that you do with a traditional credit card,” Pavini says. “When you punch in your PIN, on the other hand, the transaction isn’t processed through those channels, and you probably won’t get that same fraud protection, should problems arise regarding your purchase.”
- Dispute resolution. Most cards actually have a very good purchase protection policy. Certain cards are now offering auto-rental collision and theft coverage. And don’t forget, the card issuer can fight for you. If you have a dispute with a merchant or vendor, work with your credit card company to help resolve your issue.”
If the horse is already out of the barn and you desperately want to up that credit score as soon as possible, credit restoration will help you move forward with your life’s goals and plans. Maybe it’s time to invest in repairing your credit!