How to dispute a credit card charge: A step-by-step guide

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Despite your best intentions, errors or fraudulent activity can appear on your credit card statement. Fortunately, as a consumer, you have the right to dispute these charges. Even if you're unsatisfied with a purchase, you may still have grounds for a dispute. Understanding the process can help protect your finances and your rights.

What is a credit card dispute?

A credit card dispute is a process where you work with your card issuer to correct errors or address fraudulent charges. The Fair Credit Billing Act (FCBA) protects you as a consumer, giving you the right to dispute charges and withhold payments until you resolve the dispute.

You can dispute charges for several reasons:

• Unauthorized charges
• Billing errors
• Dissatisfaction with goods or services received

When you initiate a dispute, the credit card issuer temporarily reverses the transaction (called a chargeback) while investigating your claim. If you have a valid dispute, the chargeback becomes permanent.

Time limits for disputes

It’s important to monitor your credit card statements and act quickly if you spot an error or potential fraud.

• You typically have 60 days to dispute a charge
• Your issuer has 30 days to acknowledge your request
• The issuer must resolve the dispute within 90 days

Joseph Stemmle, a certified financial planner and financial advisor at Riverstone Wealth Advisory Group, recommends being proactive. “Most credit card companies allow you to set up alerts around cash withdrawals, purchases made online or by phone, if your card is used in a different country or currency, and unusually large purchases,” he says.

“It can help identify charges you could dispute because you receive an email or text message the moment someone uses your card for these transactions.”

What to do before you dispute a charge

Before initiating a dispute, carefully review your statement to confirm whether the charge is genuinely an error or potential fraud. Sometimes, what appears to be a discrepancy is a valid charge. For instance, the merchant might post a purchase on a date different from when you made it, but this doesn't necessarily indicate an error.

Next, check if the charge is still pending. You can't dispute pending charges because they may not reflect the final amount. The issuer must wait until the merchant finalizes the transaction before addressing any disputes.

If you suspect an error in a pending charge, monitor your account and wait until it posts before taking action. This usually takes a few days. Once the charge posts, you can proceed with the dispute if you still believe there's an error.

Erika Safran, certified financial planner and president of Safran Wealth Advisors, suggests gathering relevant information: "See what you can do to figure out the charge, like how subscriptions have limited introductory prices that you may not be aware of. But if you have a receipt showing one charge and the credit card another, that could be fraud, and you have cause to contact your credit card company."

Step-by-step guide to disputing a credit card charge

Step 1: Contact your credit card issuer

Contacting your credit card issuer can help you determine what additional steps you may need to take to dispute a transaction. In most cases, you can send a secure message after logging into your account online or by calling the issuer.

When speaking with a representative, be sure to have all necessary information on hand — receipts, correspondence with the merchant, or other proof that shows you didn’t make the transaction if you suspect fraud.

Step 2: Follow up in writing

While calling or sending a message to your credit card company can help you dispute a charge, it won’t kickstart the protections consumers have under the FCBA. To qualify for these protections, you must send your credit card issuer a written letter within 60 days of the statement mailed to you with the error in question.

When writing your dispute letter, include your name and credit card account number, the charge you’re disputing, and why you’re doing so. Contact your credit card issuer to see which address to send the letter.

Step 3: Continue to pay your bill

Even if you’re disrupting a charge, you’re still responsible for other legitimate charges on your credit card bill. Continuing to pay also shows you are a responsible credit card owner and prevents you from costs like late fees and interest charges.

The credit card issuer may have temporarily reversed the disputed charge during the dispute. In this case, you’re not responsible until a decision has been made about the dispute.

Step 4: Monitor the progress of your dispute

Your credit card company needs to let you know in writing that it received your dispute and is working on investigating it within 30 days. The issuer must also investigate and let you know the findings within 90 days.

If you haven’t received a response within 30 days, consider contacting your credit card company whether it received your letter. Sending your written dispute via certified mail may help you monitor when the issuer received the letter.

Step 5: Review the resolution

Your credit card issuer will inform you in writing the findings of their investigation and their decision. If the charge was in error or fraud, the issuer will remove the charge, and you will owe nothing. However, if the issuer believes all or part of the charge is correct, you’re responsible for the amount owed.

If you disagree with the outcome of the dispute, you can contact your credit card company in writing within ten days and say you refuse to pay the amount owed and explain why. However, the credit card company may report a late or nonpayment, which could negatively affect your credit score, and even start collection procedures.

Your rights during the dispute process

You are protected under the Fair Credit Billing Act if you inform your credit card company in writing to dispute a transaction. During the dispute process, you can withhold payment on the disputed amount. However, you are still legally responsible for paying your bill for legitimate charges.

Your credit card company can’t take or threaten any legal action against you in an attempt to collect the amount you may owe in dispute. It also can’t close or restrict your credit card, though an exception is that it can count the disputed amount against your credit limit. You also have a right to an explanation of why a dispute was or wasn’t approved.

Under the FCBA, credit card companies also can’t report to the credit bureaus a disputed amount as delinquent, though it can state you’re disputing a bill. If you’re applying for new credit, it’s illegal to deny your application on the grounds that you’re disputing a charge.

Tips for a successful dispute

In order to increase your chances of success, consider these best practices when disputing a credit card charge:

• Get organized: Gather all relevant documentation, such as receipts, correspondence with the merchant in question, and other documentation.
• Act quickly: You have 60 days from receiving the bill with the transaction to dispute the charge. While you can call, sending a written letter protects you under the Fair Credit Billing Act.
• Be clear: When contacting the card issuer, offer clear and concise information to help ensure a smoother dispute process.
• Follow up regularly: If needed, contact your credit card company to see if it can provide any updates. Being polite goes a long way.

What to do if your dispute is denied

You can appeal the decision if your credit card issuer denies your dispute. As mentioned before, you can contact the issuer in writing, stating you don’t agree with the decision.

You can also consider contacting regulatory bodies like the Federal Trade Commission (FTC) or the Consumer Financial Protection Bureau (CFPB), especially if you believe your creditor didn’t follow the correct procedures during the dispute.

The bottom line

Understanding your rights, including how long you have to dispute a credit card charge, is key when contacting your issuer about an error or fraudulent transaction. Since you only have a window of time to file a dispute, you’ll need to act quickly. Keep all necessary documentation, and be sure to be proactive in monitoring credit card statements so that you’re not paying for charges you didn’t make.

Editorial disclosure: Opinions expressed are author's alone, not those of any bank, credit card issuer, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the post.