Money Management

Credit card disputes aren’t always decided in the cardholder’s favor. Learn what happens when you lose a credit card dispute and if you can appeal. 

One of the benefits of paying with credit cards is that you have the option to dispute transactions when necessary. You’re expected to try sorting the issue out with the merchant first (unless it’s fraud). But if that doesn’t work, you can file a dispute and attempt to get your money back.

This can protect you in all kinds of situations. If you were billed for a service you canceled, such as a gym membership, you can dispute it. If a product you ordered arrives damaged, or doesn’t arrive at all, you can dispute it.

When you dispute a charge, the card issuer will contact the merchant and investigate. If you have a valid dispute, and you provide enough information, the dispute will most likely end in your favor. However, there are situations where card issuers side with the merchant.

I have some firsthand experience in this situation, and I know how frustrating it can be. Whether you just lost a credit card dispute, or you’re curious about what would happen, here’s what to expect.

The charge goes back on your credit card

When you first dispute a transaction, your card issuer gives you a provisional credit for it. You don’t need to pay that charge while the dispute’s in process. If you win, then the provisional credit becomes a full reversal of the charge.

If you lose your dispute, then the charge goes back on your credit card bill. You’ll be expected to pay it, just like any other transaction. Even if you don’t think it’s valid or that you should be required to pay it, you are. If you refuse, you’ll be charged late fees, and the non-payment will negatively impact your credit score.

The card issuer will send you a letter explaining the decision

You’ll receive this letter in the mail, and it will likely also be available online in your credit card account. The letter will explain why your card issuer found in the merchant’s favor. For example, if you didn’t receive a product you ordered, and the merchant provided tracking information that confirmed delivery to your address, the dispute may be closed in its favor for that reason.

You can take it further with an appeal or an official complaint

Losing a dispute isn’t the outcome anyone hopes for. If you think you have a valid case, there are still a few options available to you.

The first option to pursue is filing an appeal. Check with your card issuer about how to do this, and make sure to provide any further information or evidence you have to support your case. Sometimes, explaining your side better and sending more evidence, can get your card issuer to decide in your favor.

You could also file a complaint with a consumer protection agency. Here are a few options:

Consumer Financial Protection Bureau (CFPB)Federal Trade Commission (FTC)Your state’s consumer protection agency

You’d be surprised at how effective a complaint to the right agency can be. I once lost a $582 credit card dispute for a Booking.com rental, where the home was nothing like the pictures or description. During the dispute process, I offered to send my photo and video evidence, but a Chase representative told me that they didn’t use that type of evidence.

That turned out to be incorrect, and by the time I found out I could provide evidence, it was too late to do anything. So, I filed a CFPB complaint. Chase reviewed the call recordings, learned that I had received incorrect information, and credited me the full $582. Consumer protection agencies are no joke, and businesses do follow up regarding these complaints.

Winning your credit card dispute the first time around

You can appeal a dispute if you lose, but ideally, you won’t need to do that. Here’s how to give yourself the best chance of a successful dispute:

Contact the merchant first. Unless it’s a fraudulent transaction, you’re expected to try working it out with the business. If you and the merchant can’t come to an agreement, that’s when you can file a dispute.Make sure you have a valid claim. There are lots of reasons you can file a dispute, including billing errors, quality issues, and unfulfilled orders. But some situations don’t qualify. For example, if you only have buyer’s remorse, you’re unlikely to be successful with a dispute.Gather evidence. Look for any evidence you can find to support your case. Let’s say you rent an apartment that’s nothing like the listing. Take screenshots of the listing, and take pictures of the rental you received to demonstrate the difference.Provide all your information and evidence when you file the dispute. It’s better to give your card issuer all of this from the beginning. You don’t want to end up going through an appeal because your card issuer didn’t fully understand the issue or think that you provided sufficient proof of your claim. If you have trouble doing this online, call the number on the back of your card and submit your dispute by phone.

Disputing a credit card charge isn’t something most people need to do too often, so you may not be familiar with the process. If you do all of the above, the odds will be in your favor.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.

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Some financial lessons stay with you a long time. Here are some of the ones that have helped me tremendously. 

Like many kids, when I was younger, I didn’t always want to listen to my parents. When they said to go to bed, I’d often sneak a book under my blanket and read it with a flashlight. When they told me to come home at 10 at night, I’d sometimes push it and come home at 10:30.

But one of the things I did make a point to listen to was the financial advice my parents gave me as I got a bit older — old enough to earn money of my own, at least. Here are some of the lessons they taught me that I’m thankful for to this day.

1. Always have emergency savings

You never know when life might throw you a curveball. One thing my parents always insisted on was having an emergency fund. And they encouraged me to build one as well.

Through the years, my savings account has bailed me out on multiple occasions. In my 20s, my emergency fund helped me buy a new car when my previous one got totaled in a minor accident. In my 30s, my emergency fund helped cover numerous home repairs. And more recently, my savings came to the rescue when my daughter and dog had to visit the emergency room in the same week.

A recent SecureSave survey found that 63% of Americans don’t have enough cash reserves to cover an unplanned $500 bill. I’m really glad my parents taught me early on how important it is to not be in that boat.

2. Never carry a credit card balance forward

I opened my first credit card when I went off to college. My parents warned me from the beginning that I should make a point to pay my balance in full every month, rather than carry it forward. They also instilled in me to only charge a sum I could afford so that I’d be able to pay my balance off in full each month.

I have many friends who, through the years, have lost a fair amount of money to credit card interest. I’m grateful for the fact that despite having had many credit cards in my day, I’ve never paid a dime of interest to any of the companies that issued me one. And not wasting my money on interest has made it possible for me to meet other financial goals.

3. Don’t take on too much house

My parents aren’t the type to stick their nose into their grown kids’ business, so when my husband and I started looking for a house to buy, they sat back and let us run the show. One thing they did warn us about, however, was to not take on too much house. We heeded that advice, and it’s served us well ever since.

My husband and I opted to buy a home well below the top end of our price range. As a result, we’ve had a low mortgage loan all these years relative to our income. That’s made it easier to cope with the repeated home repairs we’ve faced. And it’s also allowed us to continue to do some of the activities we love, like travel, without having to pinch pennies all the time.

Although I speak to and see my parents on a regular basis, I can’t remember the last time I stopped to thank them for their terrific financial advice. But maybe I should do that more often. These specific tips have really helped me work toward my different personal finance goals and avoid a world of financial stress. And those are things I’m perpetually grateful for.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Refinancing is a less-attractive prospect than it was a few years ago. Keep reading to learn why you might want to do it anyway. 

If you managed to secure a mortgage loan in the salad days of 3% rates in 2020 and 2021, you might feel very lucky indeed. As of this writing, the average rate on a 30-year fixed loan is sitting at 7.44%, according to Freddie Mac, a figure more than double the rock-bottom rate many people were fortunate enough to scoop up just a few short years ago.

If you got your loan before or since, or had a less-than-stellar credit score at the time, however, you might have locked in a higher rate and are waiting for the right time to refinance your mortgage. And you might assume that since rates are higher than they’ve been in several years, now is not the time. But wait! Here are a few perks to refinancing your mortgage, even when rates are up.

You could pay off your home sooner

The 30-year fixed-rate mortgage loan is extremely popular, and much lauded — even investing great Warren Buffett is a fan. Stretching out a loan over three decades makes homeownership affordable for a lot of people for whom it would be an impossible prospect otherwise. That said, there are certainly benefits to be found in a shorter mortgage term, and one reason to refinance (even when rates are up) is to shorten yours.

Let’s say you’ve changed jobs since you first signed your mortgage, and are now doing much better financially. You might decide to swap a 30-year loan with 25 years of payments left on it for a new 15-year mortgage instead, which will mean you’ll end up with a paid-off home a full decade earlier. It might not be an ideal scenario if rates are up, but I’ll note here that rates on 15-year loans are lower than they are on 30-year loans (less risk for the mortgage lender, after all). As of this writing, the average is 6.76% (according to Freddie Mac again). And if you’ve got a strong credit score, you might beat that average, too.

That said, you don’t have to go as far as refinancing with a higher rate but a shorter mortgage term if you’re hoping to get free of the loan sooner. Another option (and a cheaper one, too) is just to make extra payments on your current loan. One strategy for this is to pay half of your mortgage payment every two weeks rather than making your regular payment once a month. In this scenario, you’ll end up making an entire extra monthly payment every year. You can also aim to apply any extra money you receive, such as a bonus from your employer or tax refunds, toward your loan.

You can add or remove a co-borrower

Another less-discussed benefit to refinancing your mortgage is the ability to change whose name is on the loan. Let’s say that in the years since you got your home, you’ve gotten married or divorced. If your new spouse has excellent credit and a high income, adding them to your refinance application could pay off in helping you qualify for the best rate available now.

And if your ex had lousy credit and you were saddled with a higher rate than you wanted at the time you bought, shedding them from the loan could also help you get a better rate now.

You can pay off debt

Finally, a potentially overlooked reason to refinance, even with rates at 7% and above, is that accessing your home equity can help you pay off higher-interest debt, like that on a credit card. In this instance, you’d want to apply for a cash-out refinance, which swaps your old loan for a new one for a higher amount than you owe on your house. Then you get the difference in cash, and you can use it for whatever you want.

Given that the average credit card APR is 27.80% as of this writing (per Forbes), even if you refinance your mortgage to a rate of 7.5%, you’re still coming out ahead. And since credit card interest accumulates very quickly, saving yourself stress and money this way can be a good idea.

Ideally, you’d be looking at lower rates if you’re hoping to refinance your mortgage loan — but rates are up and we don’t know when they’ll decrease to the level we’ve gotten used to these last several years. In the meantime, if you’re considering a refinance, doing it for one of these perks might just be a solid move.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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