Your rights as a credit card consumer come from a cluster of federal statutes that cap what you can owe on unauthorized charges, give you a formal process to dispute billing errors and defective purchases, require clear disclosures before rates or fees change, and limit how debt collectors can contact you. The core laws are the Fair Credit Billing Act, the Truth in Lending Act, the CARD Act of 2009, the Equal Credit Opportunity Act, and the Fair Debt Collection Practices Act. Knowing which law covers which problem is most of the battle.
If Someone Uses Your Card Without Permission
The most you can owe for unauthorized charges on a credit card is $50 under the Fair Credit Billing Act.1Legal Information Institute. Fair Credit Billing Act (FCBA)2Visa. Visa Zero Liability Policy3Mastercard. Mastercard Zero Liability Protection
Debit cards work differently, and the gap matters. Under the Electronic Fund Transfer Act, your liability depends on how fast you report the problem: $50 if you notify your bank within two business days, up to $500 if you wait longer than that but less than 60 days after your statement is sent, and no federal cap at all if you miss the 60-day window.4Office of the Law Revision Counsel. 15 USC 1693g – Consumer Liability With a debit card, the money disappears from your checking account first and comes back only after the bank finishes investigating.
Being listed as an authorized user on someone else’s card does not generally make you liable for the balance. The primary cardholder signed the agreement. If a collector contacts you claiming otherwise, ask for a copy of any contract you supposedly signed, and point to your credit report, which typically shows your authorized-user status.5Consumer Financial Protection Bureau. Am I Liable to Repay the Debt as an Authorized User?
Disputing a Charge That Shouldn’t Be on Your Statement
The Fair Credit Billing Act defines “billing error” broadly. It covers unauthorized charges, charges for the wrong amount, charges for goods never delivered or not accepted, payments the issuer failed to credit, plain math mistakes, and any charge you simply need clarified. An unfamiliar line item is enough on its own.6Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors
How to File
You have 60 days from the date the issuer mailed or delivered the statement with the error.1Legal Information Institute. Fair Credit Billing Act (FCBA) The dispute must be in writing and must include your name, your account number, the dollar amount of the charge, and why you think it’s wrong. Send it to the “billing inquiries” address on the statement, which is not the same as the payment address. Certified mail with a return receipt gives you proof of delivery.
What the Issuer Must Do
The issuer must acknowledge your dispute in writing within 30 days. The investigation must finish within two full billing cycles, and no more than 90 days total.6Office of the Law Revision Counsel. 15 USC 1666 – Correction of Billing Errors While it’s pending, the issuer cannot try to collect the disputed amount, restrict your account, or close it over the unpaid contested charge, and your credit score should not take a hit because of it.
If the Issuer Says You Still Owe It
A denial must come with a written explanation and, if you ask, copies of documents showing you owe the amount.7eCFR. 12 CFR 1026.13 – Billing Error Resolution You can send a follow-up letter stating you still dispute the charge. After that, the issuer can report the amount to credit bureaus, but it must flag that you dispute it and tell you the name and address of every entity it reported to. If the matter is later resolved in your favor, the issuer has to correct those reports.
When direct communication stalls, you can file a complaint with the Consumer Financial Protection Bureau. Companies generally respond within 15 days, with complex cases taking up to 60.8Consumer Financial Protection Bureau. Learn How the Complaint Process Works
Disputing a Defective Purchase Through Your Card
Billing-error disputes handle charges that shouldn’t be on your statement. A separate provision, 15 U.S.C. ยง 1666i, covers something different: you bought something with the card, it turned out to be defective, and the merchant won’t make it right. You can assert any claim or defense you have against the merchant directly against your card issuer, which effectively puts the issuer on the hook alongside the seller.9Office of the Law Revision Counsel. 15 USC 1666i – Assertion of Claims and Defenses Against Card Issuer
The conditions: the transaction must exceed $50, it must have occurred in your home state or within 100 miles of your billing address, and you must first make a good-faith attempt to resolve the problem with the merchant. The dollar and distance limits drop away if the merchant is the issuer itself, is controlled by the issuer, or sold you the product through a mail solicitation the issuer participated in. The most you can recover is whatever balance remained on that transaction when you first notified the issuer, so raise the issue before you pay the purchase down.
Rate Changes, Fees, and What the Issuer Must Tell You
The CARD Act of 2009 reshaped how issuers can change your borrowing costs. The core rule is no surprises.
Interest Rate Increases
Your issuer must give you at least 45 days’ written notice before raising your interest rate or changing other account terms, and during that window you can cancel the card and pay off the existing balance at the old rate.10Legal Information Institute. Credit Card Accountability Responsibility and Disclosure Act of 2009 Issuers generally cannot raise the rate on debt you’ve already accumulated. The one exception: if you fall more than 60 days behind on a payment, the issuer can apply a higher penalty rate to your entire balance, but it must end that increase within six months once you resume paying on time.11Office of the Law Revision Counsel. 15 USC 1666i-1 – Limits on Interest Rate, Fee, and Finance Charge Increases
Late Fees and Over-the-Limit Fees
Federal safe-harbor caps set penalty fees at $27 for a first late payment and $38 for a second violation of the same type within the next six billing cycles.12Consumer Financial Protection Bureau. Regulation Z 1026.52 – Limitations on Fees A 2024 CFPB rule that would have cut the cap to $8 was voided by a federal court, so the pre-existing amounts remain in effect.13Independent Community Bankers of America. Judge Scraps CFPB Credit Card Late Fee Rule Issuers can charge less, but they can’t exceed the safe harbor without a cost analysis supporting the higher fee.
An issuer cannot charge you an over-the-limit fee unless you’ve specifically opted in to over-the-limit coverage. Without your consent, the transaction simply gets declined.14Consumer Financial Protection Bureau. Regulation Z 1026.56 – Requirements for Over-the-Limit Transactions The opt-in notice must be separate from other account disclosures, and you can revoke your consent at any time.
Disclosures You’re Entitled To
The Truth in Lending Act requires issuers to present rates and fees in a standardized table (the Schumer Box) on every application and solicitation, showing the APR for purchases, balance transfers, and cash advances, the length of any introductory rates, annual fees, grace period details, and the balance calculation method.15Office of the Law Revision Counsel. 15 USC 1637 – Open End Consumer Credit Plans Cash advances and balance transfers often carry separate fees and higher rates than regular purchases, and the fee amount or percentage must appear in bold text in the disclosure table.16eCFR. Truth in Lending (Regulation Z) Cash advances typically start accruing interest immediately with no grace period.
Your monthly statement must arrive at least 21 days before the payment due date. If the issuer sends it late, it cannot treat your payment as overdue during that 21-day window.17eCFR. 12 CFR Part 1026 Subpart B – Open-End Credit Statements must also include a minimum-payment warning showing how long payoff would take at the minimum and how much interest you’d pay getting there.
Discrimination and Rules for Applicants Under 21
The Equal Credit Opportunity Act prohibits lenders from factoring race, color, religion, national origin, sex, marital status, or age into credit decisions, at any stage: applications, credit limit decisions, account closures.18Office of the Law Revision Counsel. 15 USC Chapter 41, Subchapter IV – Equal Credit Opportunity If an issuer denies your application or reduces your credit line, it must send an adverse action notice within 30 days explaining the specific reasons or credit score factors behind the decision, and you can request a more detailed explanation.
Applicants under 21 face an added rule. No one under 21 can open a credit card account unless they either demonstrate an independent ability to make the required payments or have a cosigner who is at least 21.19Office of the Law Revision Counsel. 15 USC 1637 – Open End Consumer Credit Plans “Independent ability” means income or assets in the applicant’s own name; a parent’s income doesn’t count unless it’s regularly deposited into an account the applicant controls.20Consumer Financial Protection Bureau. Regulation Z 1026.51 – Ability to Pay Credit limit increases before 21 need the same proof or a cosigner’s written agreement. Authorized-user status is exempt, because an authorized user has no liability.
If the Debt Goes to Collections
Once a credit card debt is sent to a third-party collector, the Fair Debt Collection Practices Act applies. Collectors cannot call before 8 a.m. or after 9 p.m. in your local time zone, or at any time or place they know is inconvenient.21Office of the Law Revision Counsel. 15 USC 1692c – Communication in Connection With Debt Collection They cannot threaten violence, use obscene language, make repeated harassing calls, misrepresent what you owe, pretend to be attorneys, or threaten legal action they don’t intend to take.
Within five days of first contacting you, the collector must send a validation notice identifying the creditor, the amount owed, and your right to dispute. You have 30 days to request written verification. If you do, collection activity must stop until the collector provides it.22eCFR. 12 CFR Part 1006 – Debt Collection Practices (Regulation F) That’s your safeguard against debts you’ve already paid, debts that aren’t yours, or amounts inflated by unauthorized fees.
You can also send a written cease-communication letter. Once received, the collector can contact you only to confirm collection is ending, notify you the creditor may pursue a specific legal remedy, or inform you that a specific remedy will be pursued.23Federal Trade Commission. Fair Debt Collection Practices Act The letter stops the calls. It doesn’t erase the debt, and the creditor can still sue.
Extra Protections for Active-Duty Servicemembers
Two laws add protections on top of everything above. Under the Servicemembers Civil Relief Act, credit card debt incurred before entering active duty cannot be charged more than 6% interest per year during the period of service, and that 6% cap includes fees and service charges, not just the stated interest rate.24U.S. Department of Justice. Your Rights As a Servicemember – 6% Interest Rate Cap for Pre-service Debts The issuer has to forgive any interest above 6% retroactively to the date of the orders and reduce the monthly payments accordingly.25Office of the Law Revision Counsel. 50 USC 3937 – Maximum Rate of Interest on Debts Incurred Before Military Service To claim it, the servicemember provides written notice and a copy of military orders to the creditor within 180 days after leaving active duty. Joint debts with a spouse qualify if both names are on the account.
The Military Lending Act covers new credit extended to active-duty servicemembers and their dependents. It caps the Military Annual Percentage Rate at 36%, a figure that bundles interest with credit insurance premiums, debt cancellation fees, and most other account charges.26National Credit Union Administration. Military Lending Act (MLA) For credit cards specifically, bona fide fees that are reasonable for their type can be excluded from the 36% calculation, so the MLA cap bites somewhat less on cards than on other loan products.
What About Merchant Surcharges
Federal law permits merchants to add a surcharge when you pay by credit card, capped at 4% of the transaction, and the surcharge must appear as a separate line item rather than being folded into the listed price. Several states prohibit surcharges entirely, though some of those bans have faced court challenges. Surcharges on debit and prepaid card transactions are prohibited nationwide. The specific rules depend on the state you’re shopping in.