Still More to Know About Using a Credit Card

Merchants cannot charge more for using a credit card for your purchases. But they can offer a cash discount. The Federal Truth-in-Lending Act prohibited surcharges on credit card purchases until 1984. Since then there has been no federal action taken. According to Bankcard Holder of America, Colorado, California, Connecticut, Florida, Kansas, Massachusetts, New York, Oklahoma. Texas and Maine all have laws against surcharges.

Offering a cash discount on an item is a way to in essence charge more for credit card purchases. A merchant cannot charge you more than the labeled price, but the cash price might be lower. Watch for small print when ordering from a catalog that offers cash discounts or notes that all prices reflect a cash discount.

Another thing to note is that certain government agencies cannot by law pay certain fees such as the processing fee banks charge for handling credit card transactions. Since the bank is still going to require this fee be paid, you may have to pay this surcharge when using your credit card with certain government agencies. For example, you may pay a fee for the privilege of using a credit card to renew your vehicle registration or driver's license.

Paying your credit card bill by the due date. The Uniform Commercial Code states that a bill is considered paid on the date it is postmarked. Many states have different laws. You will need to check with your lender to find out what their practice is. They may require that it be received and processed by the due date. Be sure so you don't accrue unnecessary interest or late fees.

If you have a bank account at the same bank that has issued your credit card it is possible that they can freeze your account to receive payment for you bill. Check your cardholder agreement to find out if this applies to you. The typical cardholder agreement gives the issuing bank the right to take money from you savings or checking account that you have with them if you are delinquent on your bill. If this is not in your cardholder agreement, you will want to check the fine print of you bank account as well. Note that the Fair Credit Billing Act requires that you must be properly notified of such a dispute before they can take any collection action.