How to Dispute Credit Card Charges and Win

Estimated read time: 12 minutes

Not every charge on your credit card bill is supposed to be there—fraud, charges for services not rendered, and even simple mistakes might appear on your card's monthly statement.

What's alarming is these errors not only can cost you money, they may even show up on your credit report after that!

If an unauthorized person or merchant used your credit card information to make a purchase you never approved of, why should you be held accountable?

These charges won't just cost you right away—they can also tarnish your credit report and keep it from looking nice and clean as it should.

This can lower your credit score and hurt your future prospects in financial endeavors like taking out an important loan or getting lower insurance premiums.

But luckily for us, it's not difficult to dispute erroneous credit card charges.

People do it all the time, and we'll show you how you can successfully do it too!

The Three Types of Disputes

There are three main types of charges you should know about when you go to dispute them with the credit company: fraud, billing errors, and services not rendered.

You need to approach and dispute each one differently, so it's good to know what they are and how they're different.

Fraudulent purchases occur when someone uses your card without permission

Credit card fraud can come in many different forms, but the key here is that it was never your fault, so you shouldn't be the one paying for it.

Fraud is when an unauthorized charge has been made against your card. It can be for something as small as a dinner for one, or as large as a new car. The point is, you never authorized the payment—someone else did by pretending to be you.

1 out of 10 Americans experience credit card fraud every year, so it's good to always check monthly statements for any errors or suspicious charges.

This happened to me once when I was traveling across the country with family on a road trip, and the card I used for gas suddenly had charges from a big box store in a state I had not even visited.

Luckily I caught the charges by having alerts set up, and was able to easily dispute the charges within seconds right from my cell phone.

Billing errors occur frequently and should always be disputed

Billing errors are actually more common than you think, and that's all the more reason to be on the lookout for them.

A billing error is when you are incorrectly charged for services or goods purchased. Usually, this will look like being billed twice for something you only bought once, being charged the wrong amount, or being charged for another item instead of the one you purchased.

If you don't get the refund you deserve, dispute it

Not all services and goods turn out the way you expect, and not all merchants give you the refund you're looking for—but should you still have to pay for a service you never got?

Non-rendered services are when you're charged when you're owed a refund. For instance, if you bought a supposedly brand-new lawn set from a third-party vendor on Amazon but it arrived all scuffed—that's a non-rendered service.

I experienced this first hand when I ordered a small plush cartoon character for my daughter, online, and ended up getting a set of noise cancelling headphones instead!

It was frustrating to get charged and then end up with wrong thing, especially with a little one waiting for a surprise.

I disputed the charge, and had to take the time to repackage and return the item to get a refund, which was another hassle.

Then I had to go back and hunt down the original item I wanted, but this time I went through another seller.

If you have this same type of experience, you deserve a refund and if there's no refund, it's a charge worth disputing.

You should always take your complaints seriously—they're protected under federal law!

So, if you really think you are owed a refund, you are well within your rights to pursue that goal.

How to Dispute the Charge

Now that you know what charges you're looking to dispute, the next step is figuring out exactly how to do that.

Here's the one thing to keep in mind through all of this—it really is easier than you think, plus you got the law on your side, so don't give up hope!

Credit card users are protected under the Fair Credit Billing Act

The Fair Credit Billing Act is a US federal law that protects consumers from being billed wrongly, especially when it comes to credit cards and the billing errors linked with them.

The law allows disputes to be made via written notice to the creditor. This is the most important part of the law—disputes only activate once a written notice has been received by the creditor.

Some creditors will allow electronic notices via the internet, but you should check with your credit card company to make sure it accepts notifications in that manner.

Notices by phone are case-by-case and will technically never activate your rights under the Fair Credit Billing Act—your best bet is mail.

If you're even a little unsure about how to write one of these letters—use a template online.

There are no strikes against you for copying a letter and filling in the blanks to match your situation.

In fact, the Federal Trade Commission offers a helpful template on its own website!

The important thing is that your letter describes the charge, including the amount and why it's inaccurate, states that you'd like to dispute it, and states what has been enclosed with the letter (e.g. any proof to show that the charge is an error).

Mail the dispute notice to the address listed on your statement as "billing inquiries." Make sure you don't send the dispute to the address you use to send payments—that's a different department entirely and your dispute will likely be lost in the mail.

Under federal law, disputes must be made within 60 days of the statement date. This means you should make it a habit to check your statement at least once or twice a week so that you catch any errors with plenty of time left to file a dispute.

If you wait too long, unfortunately, you'll have to live with whatever error you find.

Remember, this means any letters to your creditors should arrive before the 60 days are up, and those 60 days start not from the date your card was charged, but the date it appeared on your card's statement.

The creditor has 30 days to acknowledge the dispute and two billing cycles to deal with it. Make sure you get proof from your credit card company that the letter was received as well.

Then, within those two billing cycles (i.e. two months), or at the most no more than 90 days, you'll either get a letter stating why they think there was no error, or corrections will be made to your account.

You will either see a chargeback credited to your account for the disputed amount, or you will receive a letter explaining why the dispute was considered frivolous.

Don't take rejection as final, especially if the dollar amount is high. You can always refile a dispute and argue your case further if your card issuer denies it the first time around.

Also, if you feel you're being treated unfairly by your creditor, you can check with the National Association of Consumer Advocates for legal options.

You can also complain to the Better Business Bureau and the Treasury Department's Office as well.

Thoroughly reviewing your card's statements monthly will keep it clean of errors

Proper hygiene is a crucial part of health—without it, bad things will start to happen to your body.

Similarly, if you don't check your card statements regularly, chances are unwanted things will start happening to your financial health.

Credit card companies will send statements by mail or email. When you first sign up for your credit card, make sure you are clear with just how and when the credit card company will be notifying you.

It doesn't hurt to ask if you can get notifications by text as well to help you keep on top of your statements as you use your card.

Determining if your charges are due to fraud, error, or bad services will make them easier to dispute

Not only is it crucial to know how to read a credit card statement, you have to be able to know what type of charge it is you're disputing.

The process of disputing a claim will differ for fraud, billing errors, and services not rendered. It's important to be aware of the key differences between each, so that you can know just how to dispute the charge you're looking at.

If the charge is fraudulent, inform your card issuer directly and immediately

Usually, credit card companies catch the fraud before you even see your statements, but if any fraudulent charge gets through, you'll have to dispute it directly.

Make sure the charge is fraud, not a family member or a forgotten purchase. This may sound obvious, but it's easy to make a purchase on a card and forget about it if you have more than one account or lend your card to friends and family.

As a rule of thumb, unless you'd be willing to file a police report, you shouldn't dispute it as fraud.

That's not to say you have to go to the police to dispute the charge, but that you should be confident you have been a victim of identity theft, not of your own faulty memory.

Contact your card's issuer directly and notify them of the fraudulent charge. Most of the time, your issuer will reimburse the money lost, and possibly issue you a new card with new numbers to prevent any case of theft from happening again.

Unfortunately, the perpetrators often get away with their crimes simply due to lack of resources and the effort it would take to track them down—and that's all the more reason to be on the lookout for fraud.

Identity theft is very common, and after last year's Equifax breach, now might be the perfect time to get in the habit of checking your card statements for impostors!

If the charge is a billing error, contact whoever's billing you, and then your credit card company

Sometimes when you get charged, an error occurs with how your card is charged, and you either end up paying too much, paying twice, or something else along these lines.

Make sure you dispute errors like these as soon as you catch them.

To dispute billing errors, first, try resolving the issue with the person billing you. This can be as simple as contacting them by email or going to the store you made the purchase at and explaining the situation to a manager.

Often times, sellers and shops operate under the principle of the customer always being right, so you shouldn't find too much trouble if you take the dispute to them first.

But if, for some reason, they give you too much trouble, or if you continue to run into problems, then you should contact your credit card company directly and explain the issue to them.

If they don't deny the claim, and usually they won't, then the charge will likely be successfully disputed!

If the charge is for a bad service, work with the merchant first, and then talk to your creditor

Sometimes services and goods don't quite meet the standards you paid for—when that happens, you shouldn't be the one footing the bill.

If you shop often, you're probably already spending more money than you'd like, which is why disputing charges when you feel you've got the short end of the stick is important.

Try to get a refund directly from the merchant before contacting your creditor. Just as above, you'll need to make sure solving the issue by dealing with the merchant directly is out of the question before moving on.

So what you need to do first is to contact the merchant who is providing the service or goods first and see if you can get a refund.

If things go well, you'll get the refund you seek, and then you're all set—otherwise, you'll need to get your card issuer involved.

For services not rendered, you will need proof you could not secure a refund. The same goes for billing errors as well: Banks will want to make sure you tried to rectify the situation by dealing directly with the source of the billing mistake.

If you cannot secure a refund or correction from the merchant, then as before, you will need to contact your creditor and provide sufficient proof that the dispute is legitimate.

If all goes well, you can expect a chargeback to your account.

Proof that you have dealt with the merchant directly can either be in the form of a witness, or just a record of correspondences (e.g. an email or print-out of an online conversation).

Proof that services have been non-rendered can be a receipt, pictures as evidence, and any proof of conversation between you and the person or business the dispute is with.

All of this then will go with the letter you send to your credit company's billing inquiries address.

If the above doesn't work, cite claims and defenses via a letter to your creditor. Citing claims and defenses is a consumer complaint protected under federal law that looks a lot like the steps we've outlined above.

It still requires you to have contacted the merchant first, and that you send your creditor a letter disputing the charge, but there are a few differences in the stipulations and limitations.

You must cite claims and defenses within a year from purchase and for an amount greater than $50. Also, the merchant must be within 100 miles of your home and within your state, unless the purchase was made online.

Also, obviously, you can't have already paid the charge in question.

If you meet all the above criteria, you can try citing claims and defenses instead of disputing the claim as an error.

Just make it clear you're doing so in your letter to your credit card company.

Consider contacting your credit rating agencies afterward

Even if your card issuer has taken care of the problem, some of the bad ink can roll off the page and onto your credit report.

If your credit report is showing the issue as not resolved, it can affect your credit score.

Make sure the charge didn't carry over into your credit report. There are lots of ways to check your credit report, but one of the easiest is to use the site to pull your free annual credit report.

Once a year you can pull your credit report, for free, from each of the three major credit bureaus.

Once you have them, read them carefully to see whether the disputed charge has carried over or not, as well as for any other possible errors.

Just make sure you understand how to read a credit report so you don't have any trouble finding the disputed claim if it's there.

Just like with reading card statements, you want to be thorough here as well.

Report any errors directly to all three credit rating agencies to ensure they are removed. Just like disputing charges, you can do this by notifying them directly via mail and giving them time to address the marks on your report that shouldn't be there.

The whole point here is to make sure you aren't paying for charges you didn't make.

Even if you're not paying for it in cash, your credit score shouldn't take a hit either.

It's time to make sure your card statements are free from errors

You should never pay for someone else's mistakes, whether it's due to fraud, poor business practices, or any other kind of error.

Those errors can end up being costly and affect your credit score negatively.

That's why it's crucial that you act as soon as you see something isn't quite right in your card statements.

Since 1998, I've made it my life's work to provide readers the best information available online on how to take care of and improve their credit, and how to manage their personal finances well.

I hope you are able to use this information positively and the moment you catch something wrong with your statement, you can either resolve it with the person charging your card, or handle it with creditor directly.

Have you taken any of these steps to clean up your credit in the past?

What tip would you say worked best for you?

Would you like to learn more about protecting your credit score?

Let us know in the comments below!