How to Dispute a Credit Card Charge

Reviewing your credit card statements each month can help you catch bad spending habits, find and cancel unused subscription charges, and even identify incorrect purchases.

If you don’t think identifying Incorrect purchases is important, guess again. The most common complaint people make about credit cards is a problem with a purchase shown on their statement, according to the Consumer Financial Protection Bureau (CFPB). The incorrect purchase may be a simple mistake, or it may be an indication of a bigger issue, like fraud or identity theft.

If you find an incorrect purchase, it’s important to dispute the credit card charge as soon as possible. Some common reasons for disputing a charge are that it was unauthorized, you didn’t receive the product, or you were charged twice for a product or service.

Reasons for Disputing Credit Card Charges

There are many reasons you may want to dispute a credit card charge. Some are valid, but some don’t qualify.

If a charge is an error or unauthorized, you can dispute the transaction. You can also dispute charges you made in some circumstances. If you’ve simply changed your mind on a purchase or don’t like the item, and the seller doesn’t allow returns, you can’t dispute that charge.

Here are some common reasons you may dispute a credit card charge:

• You did not receive the item you purchased.
• The item was damaged or not as advertised and the seller won’t take it back.
• You did not take a cash advance that was reported on your statement.
• You were charged for a service you canceled before the charge.
• You failed to receive a credit promised by a merchant.
• You were charged the incorrect amount.
• You were charged twice for the same transaction.
• The date or amount on the charge is incorrect.
• You did not authorize a charge.

If a charge is unauthorized, federal law limits your responsibility for it to $50. But you may have to dispute the charge to prove that it’s unauthorized. Keep in mind that unauthorized charges might also be a sign of identity theft, so even if it’s a small charge, address it as soon as possible.

What is a Chargeback?

A chargeback is a credit you receive after you dispute a charge – in other words, the transaction is reversed and your card is credited for the disputed charge. Because of the Fair Credit Billing Act (FCBA), you have the right to request a credit card chargeback within 60 days from when your creditor issues you a billing statement. If your dispute is successful, you’ll receive a statement credit for the amount you paid to the merchant.

Keep in mind the chargeback may not be permanent. The creditor may provisionally reverse the charge, but if their investigation determines you’re responsible for the charge or it doesn’t qualify for reversal, the credit will be canceled.

How Long Do You Have to Dispute a Credit Card Charge?

Credit card policies vary, but you typically have 60 days from when your billing statement is issued to dispute a charge. This is why it’s important to check your statements every month, or even more often since most accounts are online and you can see new transactions daily. Don’t put it off if you suspect a charge is an error or unauthorized – address it immediately.

The credit card company will investigate once you dispute a charge. You can file a dispute through the company’s online dispute portal (most credit card companies have them), call, send an email, or mail a letter. If you filed online, sent an email or spoke to a company representative on the phone, you’ll get an email response, usually within 24 hours, telling you the dispute is under investigation. If you sent a letter, the creditor must either email you or mail you a confirmation of receipt within 30 days, telling you they’re investigating your claim.

After that, the creditor has two billing cycles to investigate. Federal law requires the company to resolve the dispute within 90 days.

If the charge was an error, the credit card company must explain to you — in writing — the corrections that will be made to your account and remove all finance or other charges related to the error.

Once the investigation is complete, you will either get a permanent account credit or you’ll be responsible for the charge.

Steps to Disputing a Credit Card Charge

Creditors are making it easier and easier to file disputes. Each company has a slightly different credit card dispute process, and some may require more hands-on involvement. Many banks and credit card companies encourage customers to file a dispute online. If this is available to you, it’s helpful, because it walks you through the necessary information that you must submit.

Here’s what you can generally expect as you go through the process:

1. Review the Charge

Before initiating a dispute, research whether the charge qualifies for a dispute. Just because a purchase is unfamiliar doesn’t mean it’s incorrect. Is it possible you forgot about making the purchase? Look up the seller to see if it rings a bell. Check email or other records for a receipt or other transaction documentation.

Credit card disputes are time-sensitive. Once you confirm that a charge is indeed incorrect, take the next steps right away.

2. Contact the Merchant

If the charge is an error or a mix-up with the seller (as opposed to fraud or identity theft), contact the seller. They may offer a refund, a credit, or some other fix. Use email if possible. This way, there is documentation about what was said. If you talk to someone by phone, write down the name of the person you speak with and the date. If the merchant can’t help, move to the next step.

3. Contact the Credit Card Company

Call the number on the back of your credit card or log into your account online for dispute information. Use the online dispute form to inform the card issuer if they have one. You’ll need to submit information identifying the charge, such as the date and amount of the transaction.

4. Gather Evidence and Send Dispute Paperwork

You may need to follow up with a dispute letter and/or documentation. If you do, the Federal Trade Commission (FTC) recommends sending the letter by certified mail to the creditor’s dedicated address for billing disputes.

The FTC recommends including these details:

• Your name and account number.
• Amount of the charge.
• Date of the charge.
• Explanation of why the charge is incorrect.
• Applicable documents, such as copies of the receipt or screenshots of vendor communications.

What to do If Your Dispute is Denied

An investigation by your credit card company does not mean the charge will be removed and you’ll get a chargeback. Credit card companies and stores that issue credit cards respond to 99% of credit card complaints sent to them for review and response, according to the CFPB. They closed 60% of complaints with an explanation in 2023, another 15% with monetary relief, and 20% with non-monetary relief.

If your dispute is denied, there may be a legitimate reason. Some of the most common reasons are that the problem with the good or service does not qualify for a dispute, or the cardholder signed a merchant contract waiving their right to dispute charges before making the purchase.

Steps to take if your credit card charge dispute is denied:

• Request an explanation of the denial in writing from the credit card company, if you haven’t been given one.
• Appeal the decision. The credit card company, in its denial communication, will explain the dispute process. (If they don’t, request the information). Pay close attention because there will be a time window, usually 10 days.
• Submit a complaint to the CFPB and/or FTC. Both agencies have consumer complaint online forms.
• If the charge is a large amount, you may want to seek legal representation. An attorney experienced in such disputes can often make more progress with a credit card company.

Do Credit Card Disputes Hurt Your Credit Score?

Credit card disputes don’t have a direct impact on your credit score. Your creditor may add a temporary statement to your credit report during the dispute investigation stating that the account is currently in dispute, but this statement does not affect your score.

A disputed charge can, however, have an indirect positive credit score impact. If you receive a chargeback that reduces your account balance, your debt-to-credit ratio (DTC) will likely be reduced, and your scores may improve as a result. The larger the chargeback, the more likely you are to see a positive change in your scores.

Protecting Yourself from False or Incorrect Charges

An incorrect credit card charge may be a simple error on the merchant’s part, but sometimes it’s more serious than that.

If you suspect a charge was made by an identity thief or fraudster, you need to protect yourself by taking action right away. In addition to alerting your credit card company, you may have to take additional steps to respond to identity theft, such as filing a police report and contacting one of the national credit bureaus.

Just as important, know your rights when it comes to credit card and other consumer disputes. Being vigilant is also key. Check your credit card statements monthly, if not more frequently. Check your credit reports as well. Online versions of credit reports are now available for free weekly from the three credit reporting bureaus – Equifax, Transunion, and Experian. Find them at annualcreditreport.com. They may show errors with accounts that you would not otherwise be aware of that go beyond one incorrect charge.