Use the Law to Protect Your Credit and Save You Money

By: Stephen Lau

Copyright (c) 2008 Stephen Lau

As a consumer, under the law, you are protected in matters regarding billing errors, defective products, interest rate on loans, lost or stolen credit cards, and leasing a personal property, such as cars, appliances for over 4 months. These laws and regulations are meant to protect your credit and save you money.

However, you must not only be knowledgeable about these laws and regulations, but also know how to apply them to your advantage.

The Fair Credit Billing Act protects you when you charge a credit card, credit line, or revolving charge account. It protects you against billing errors, defective goods or service. But you must know how to act accordingly in your best interest.

Send a written complaint to your creditor immediately (within 60 days), and include your name, account number, the item(s) in dispute, and the reasons why you think there is an error. Send it to the appropriate department or address.

However, you must continue to pay your bill while under dispute. Remember, the creditor cannot initiate any collection procedure against you; nor can the creditor send the disputed amount as delinquent to the credit bureaus. You may use this to buy more time to settle or bring your account current.

By law, the creditor must acknowledge your letter within 30 days of receipt.

If the creditor is correct and present you with copies of related documents, you must pay the bill or the amount owed. But if you think you still have a case, write within 10 days of receiving the disputed explanation.

The Fair Credit Billing Act requires all cards issuers to mail their statements to customers at least 2 weeks before payment is due, and credit payments may begin the date they arrive, but not before. The law also requires all refunds to be paid within 7 days after receiving a written request.

If you lose a credit card, you are liable to only $50, even if you don't promptly notify your credit card issuer. This is also your right as a credit card consumer.

The Truth in Lending Act ensures that the lenders must disclose the terms of the loan you are applying for, including the financial charge, the APR (which is the annual percentage cost of the loan on a yearly bases, that is, if the APR is 18 percent, you will be paying an interest of 1.5 percent of the loan a month), and any fees associated with the loan. If you receive several preapproved credit cards, always choose the one with the lowest APR and the lowest annual fee or no annual fee to save you money. Always read the fine print, and ask if you have any question.

By law, you can change your mind about getting a loan, and generally you have about 3 days to do so.

The Equal Credit Opportunity Act requires that you will be notified, within 30 days of application, the approval or denial of a loan to you. Any denial must be in writing with specific reasons. According to the law, you cannot be denied based on sex, race, marital status, religion, national origin, age, receiving welfare, or unavailability of credit insurance.

The Consumer Leasing Act is applicable to leasing for personal property for longer than 4 months (this does not apply to short-term car rental). The leaser has to provide you with the cost and terms of the lease in the form of written disclosures, such as the total cost of leasing, registration fee, taxes, maintenance and insurance, and, most important, the standards of wear and tear, such that any future dispute can be avoided, and, if not, at least resolved satisfactorily.

Review your state's laws regarding collections, and the federal Fair Debt Collection Practice Act to familiarize yourself with your rights as a consumer. When a collector knows you are knowledgeable, he or she cannot and will not intimidate you.

Always be knowledgeable of the law and your rights as a consumer. This will protect your credit and save you money.

Money Management
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