10 Things You Might Not Know About Your Credit Card
As you might imagine, we get a lot of questions about using credit cards. Based on those piles of emails we've put together a list of 10 things a lot of people don't know about credit cards. Enjoy!
1) Unsigned Cards Are Not Valid And Merchants Can And Will Refuse Them
You might think that everyone knows that you have to sign your credit card in order for it to be valid — after all — there's a panel on the back that says "Not Valid Unless Signed," but you'd be shocked at the number of angry emails we get from people who have tried to use an unsigned credit card with "SEE ID" or "CHECK ID" written on it and were turned away when they refused to sign their card.
Here's what VISA says should happen when you present an unsigned card:
1) The merchant will ask for your government ID.
2) You will be asked to sign the card. If you sign it, the signature on the card will be compared to the signature on the government ID. If you refuse, the card will not be accepted.
Here's VISA's official statement on "See ID":
Some customers write “See ID” or “Ask for ID” in the signature panel, thinking that this is a deterrent against fraud or forgery; that is, if their signature is not on the card, a fraudster will not be able to forge it. In reality, criminals don’t take the time to practice signatures: they use cards as quickly as possible after a theft and prior to the accounts being blocked. They are actually counting on you not to look at the back of the card and compare signatures—they may even have access to counterfeit identification with a signature in their own handwriting. “See ID” or “Ask for ID” is not a valid substitute for a signature. The customer must sign the card in your presence, as stated above.
Most merchants don't follow this policy, but some (most notoriously— the U.S. Postal Service), are quite strict.
2) The Maximum Liability For Unauthorized Use Of A Credit Card* Is $50 According To Federal Law
The Fair Credit Billing Act protects you from suffering damages due to unauthorized use of your credit card. If you report a lost or stolen card before anyone uses it, you are not responsible for any charges. If you do not report it before an unauthorized use you are liable for a maximum of $50.
(*Credit cards only. Debit cards and ATM cards are covered under the Electronic Fund Transfer Act, and your liability depends on how quickly you report the loss. Unlike credit cards, debit and ATM cards can have unlimited liability in certain circumstances.)
3) Merchants Cannot Require You To Present ID, Unless Your Card Is Unsigned
Some consumers enjoy it when a clerk asks to see their ID. Others do not. In some states, it's actually illegal for a store to record any additional information (such as an address or drivers license number) as a condition of processing a credit card transaction (unless the address is needed for shipping, of course.) For some reason this is always a hotly debated topic, so we'll go right to VISA for the answer:
Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures. Laws in several states also make it illegal for merchants to write a cardholder’s personal information, such as an address or phone number, on a sales receipt.
We think that's pretty clear. Don't want to show your ID? Don't.
4) Merchants Cannot Require A Minimum Transaction Amount
It's a violation of the credit card company's merchant agreement to refuse a transaction because it is below the "minumum."
VISA says:
Imposing minimum or maximum purchase amounts in order to accept a Visa card transaction is a violation of the Visa rules.
Mastercard says:
A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card
5) Merchants Cannot Charge A Surcharge For Using A Credit Card, However, They Can Offer A "Cash Discount"
You may have noticed that gas stations are starting to offer a different, higher price for credit cards. This isn't technically allowed— unless it is marketed as a "cash discount." In other words, if you fill up your car and find that you've been charged more than advertised because you paid with a credit card — that's not allowed. If, however, you decide to pay with cash because you saw an advertised "cash discount" to the "regular price" — that's ok. A subtle distinction, but an important one.
(There is something called a "convenience fee" that some institutions are allowed to charge if they do not typically accept credit cards in their normal course of business. The example VISA gives is a utility company where the customary way is to pay by mail or in person. The rules for charging this fee are somewhat complicated and there are loopholes, etc.)
6) Many Credit Cards Have Programs That Will Automatically Double The Manufacturer's Warranty And Other Excellent Benefits
We get a lot of complaints that can be easily solved by the complainee's credit card company. We've helped readers get laptops replaced out of warranty, and helped them get their money back when Best Buy sold them a box full of bathroom tile instead of a hard drive. Your card may come with extended warranty protection, 90 day accidental damage protection that includes vandalism, rental car insurance, road side assistance, baggage insurance, and return protection. You should be aware of what benefits your credit or debit card offers so that you remember to use them when you need them.
7) Merchants Are Not Allowed To Make You Give Up Your Right To A Chargeback
You might see a receipt that has suspicious-looking waiver stating that you're agreeing to give up your right to issue a chargeback against the merchant for any reason, no matter what, period. These waivers are the result of some crafty entrepreneurs selling sales-receipt paper with the waiver printed on it, claiming that it helps protect the merchant. It's all nonsense and it isn't allowed. If you see it, you should report the merchant.
8) Merchants Are Not Allowed To Place A Hold For The Estimated Tip
Because so many consumers have instant access to their account information, merchants aren't allowed to place an "authorization" for an estimated tip. For example, if you go to dinner and the bill is $100 and you pay with a credit card, the restaurant might be tempted to "authorize" your card for $120—a 20% tip. If you choose to leave a 15% tip and then check your balance — it will appear that you have been overcharged. This apparently results in lots of angry customers, so the practice has been forbidden in VISA's merchant agreement.
9) If Merchants Suspect You Of Fraud They Are Supposed To Call With A "Code 10"
If a merchant is suspicious of you, they are supposed to make a "Code 10" call. They are instructed to take your card, call in, and say “I have a Code 10 authorization request." They will then be asked a series of questions that can be discreetly answered with either yes or no. The merchant bank will then authorize or deny the card. They are not supposed to threaten to call the police or try to detain you. Mastercard says that if the police need to be involved, the "Code 10" operator will call the police while the clerk waits on hold.
10) If Merchants Break These Rules, You Can Report Them To The Credit Card Company
Here's Mastercard's Merchant Violation form. To report merchant violations to VISA, they ask that you report them to the financial institution that issued you your Visa card. You should be able to find the number your on Visa statement or on the back of your card.
(Photo: Maulleigh)
This is a test using rich text formatting and html links. It's the generic "company" ad that should appear on all posts with the Company category if they don't have an ad attached to a specific company.
Post a comment
Comments:
I have not had a problem with #1. My wife and I both have debt cards and she has a credit card. All three have "Ask for Photo ID" on them and no one has ever made me sign the back of my card. Not even USPS. On the contrary, many cashiers (probably 1 in 3) do notice the back of the card, and ask for ID.
If I was asked to sign the card I would quickly, but it has never come up.
I'm pretty sure the only people who know any of the provisions of Visa's and Mastercard's merchant agreements are Consumerist readers. I'd be shocked if any company had, as part of its regular employee training, anything about how to process credit cards other than hitting the "credit" button on the register.
I love how people think writing "please ask for id" on the back of their card thinks that is preventing ANYTHING.
On the signature bar, I write ASK FOR LICENSE as well as sign it.
Despite what Visa says, it is easier to fake a signature than to forge a realistic drivers license.
I am so sick of hearing and reading about #1. Great. They want me to sign the card. Why? Where's the control? Is it to formally establish a contractual agreement of some sort? I simply DO NOT get why Visa/MasterCard/etc. do not believe that it prevents fraud. If someone steals my credit card(s) and attempts to use it anywhere, a 'Check ID/Ask for Photo ID' will immediately prompt the cashier to ask for ID to reconcile the three pieces of information (my person, my CC and my ID); if they don't match, there's no transaction. No problem, right? Are the CC companies afraid to ask the merchants to take the extra step and ensure the card and credentials match up to the person holding them? Please, remove my ignorance here.
Thanks!
My favorite bagel and breakfast item shop just put up a sign at their cash register saying they now require a $5 minimum for credit card purchases.
I stop in there everyday on my way to work and have always payed with my Mastercard... now I have to keep cash in my wallet unless I wanna get some nasty fast food breakfast =(
Am I understanding number 4 correctly? That they are not allowed to impose this minimum purchase requirement under the Mastercard merchant agreement?
So, what exactly should I do when a merchant refuses my card to pay for a $5 sandwich? Act indignant, hold the line up and inform them of their violation?
So they dan't deny if I don't show ID, but should I show ID or not? I see so many points both for and against, which way is best.
Ben and/or fellow Consumerists - How do my power and gas company get away with charging a $3.95 processing fee for paying with credit cards?
@enine: You should only agree to show your ID if you don't know who you are. Since the merchant can't refuse the sale if you don't produce and ID, showing it won't do you any good.
@Aladdyn,
Ha, I had to read over my post 7 or 8 times before I found what you were talking about. And no, we don't over draft our DEBIT cards. But I do fight her often about the credit card.
In the picture "Not excepting American Express"
What the hell does that even mean? We're not taking any credit cards but making an exception for Amex? The whole sign is a Fail.
I did not know number 8. Then again, the one restaurant I know that does this also burns their food so I haven't been back there.
@bostonhockey: From what I've heard it's because they don't want merchants making a record of your DL#, address, etc. in addition to your credit card information. I've only had that happen to me with checks but maybe the CC companies are worried about a slippery slope.
I think they should just give people the option of having their photo on their card.
@Quatre707: Apparently so. Also, the liquor store across the street from my work imposes a 25 cent surcharge on purchases under $20. So it would appear based on #5 they are in violation.
@selectman: I have twice been able to talk merchants out of this. I told my drycleaner ($15 minimum!) that it's against card policy to charge a minimum. I told a liquor store manager the same thing. Both begrudgingly allowed me to use my credit card for the small purchases.
@selectman: take a bite out of the sandwich & suggest that they run the card again or this one's on the house.
@bostonhockey: Ugh, credit cards are not gauranteed liberties as citizens. They are issued to you by a corporation and you are using THEIR money to purchase things, so of course they want you to be bound by a contract. Signing the card is in essence signing the terms of agreement of usage. If a theif steals your card and sees that you wrote "see id" they are just going to go online where no ID at all is required. Just the sign the card and buck up.
Almost every card has a %0 liability when it comes to fraud. It is probably MORE dangerous to have some sales clerk looking at your ID than a credit card.
Can someone explain to me why a signature is required on the back of a Visa card if the merchant isn't even allowed to ask for additional information to verify it? Why sign it at all? What value does the signature provide?
@Wormfather is Wormfather: It means that there's no exception for the $10 minimum for American Express cards.
one of our local thrift stores, which also helps out people in the community with living expenses, requires a 15$ minimum on credit and debit card purchases. it used to be a 5 dollar minimum, but i guess they were getting a lot of overspent credit cards and empty debit cards.
i just thought they were trying to discourage folks from using plastic, but apparently they are breaking rules too.
i cant see spending more than 5$ there, they dont have much good.
I have NEVER had one merchant in the US refuse my unsigned credit card. I DID however, have one prick at some petrol station in England give me shit over it. I had to show him my damn passport for him to accept my credit card (the miserable SOB)....I suspect he only did it to mess with me because i was american.
Number 1 is entirely contingent on the person accepting the card not being too lazy to check. I at one point had a card marked with See ID. How often was I asked? Once. In 6 months of use. I had another card that I didn't sign as an experiment. It took 2 months of use before a mercant asked me to sign it.
So I guess the big lesson, is don't trust the merchants to protect you.
And I'll be using number 4 all the time. I never carry cash and use debit constantly (I spend cash when I have it, so it's better this way, it also lets me better track my spending habbits).
this is what aggravates me - we all experience blatant violations of the network, but visa/mc (& the others) are very lax in enforcement. i used to get really pissed off at merchants violating their contracts - now i just go elsewhere. what's the point? those complaint forms are useless. until the networks start enforcing revoking access & imposing fines, nothing's going to change.
@enine: Since I write Please check ID on the back with my signature, if the cashier asks I always pull it out. It's really up to you. While I know it won't stop every attempt to use my credit card if it was stolen, I've had enough people ask that I feel it would limit the extent of damage. Yes I know there's a $50 limit, but it's still $50.
@B: I know I was being sarcastic, but I dont know about you. :(
My super computer has deduced that they meant American Express not Accepted.
Maybe some of you all can explain to me the contradictions here. Why do Consumerist and many readers say that they're fighting for consumers, good business practices, and anti-fraud measures, etc, yet get so uppity about not having to show ID or ratting out businesses that ask for a minimum purchase with credit card use? These are typically small stores that are getting hit hard by fees and surcharges, and trying to save themselves (and you) money on theft, fraud, and fees. Yet, even as you all seem to hate big businesses, you turn around and go enforce Visa's rules for them, demanding that stores not check ID when it's suspicious, or insisting on no minimum purchase even on the smallest transactions. It's just a corporation-made policy, not the law, for godsake. And do you know why Visa has this policy? Because the theft liability is on the store, not Visa, and just so people can save a few seconds and want to use their credit cards more (so Visa earns more money).
Why are you being Visa's lackeys?
@Wormfather is Wormfather: And I thought I was the first one to notice. :(
#8 really annoys me. I also hate when a place will automatically add a tip to the bill or will write/print the suggested tip amount on the bill.
They get $0.00 for tip when they do this.
@Rectilinear Propagation: and @AnderBobo:
I never said anything about issuing my license as an ID. Why not a state issued photo ID, confirming your name and identity? And what's to stop said cashier from capturing essential information off of a check (if anyone still writes out a check at a merchant).
It has nothing to do with giving in and 'bucking' up. I simply feel that writing 'see ID' adds another layer of protection. Surely as educated Consumerists, you can't argue that it doesn't hurt in preventing fraud. A stolen card will still work online regardless of what's written/signed on the back of it.
I wouldn't fault a merchant for trying to avoid the card fees that would eat up all their profits in low dollar transactions. It concerns me how dictatorial that credit card companies have become. I'm also tired of customers who think they can dictate special rules by customizing the back of their credit card.
@B: Um...try again. I think it's someone's poor use of the English language. It's rather obvious they meant to write 'Not Accepting AMEX'.
When I was 20 I went to England with a college group. When I used my debit card there it was the first time that I had seen anybody ask for my ID. Every single shop asked for it. I was truly amazed that they went through the effort to do that.
@bostonhockey: @Wormfather is Wormfather: Blah, you guys are no fun. I was just stating what the sign said, not what it meant to say.
@chuck0008: The first thing I would do is take that Walmart card and burn it. Store credit cards are worthless and provide you with almost no consumer protections.
I got a flat on my motorcycle last summer and pushed it 200 yards to a nearby liquor store parking lot which happened to be the only "store" for miles in either direction. As I was waiting for a tow truck to come that I had called from my cell phone, it was blazing hot outside, so I wanted to buy a bottle of water, but had no cash, just credit cards. The store refused to let my buy a bottle of water regardless of telling them I was essentially broken down and waiting on a tow truck outside.
Glad that I learned #5 though, I'll now report this liquor store. Though I wonder what actually happens if anything when businesses do get reported.
Yet, even as you all seem to hate big businesses...
@kepler11: We hate BAD businesses. There have been small businesses that have gotten complaints on this site and their are large businesses that manage not to suck.
...demanding that stores not check ID when it's suspicious...
The stores that check ID do it all the time, not only when it's suspicious.
...trying to save themselves (and you) money on theft, fraud, and fees.
Wait, how does checking IDs and requiring minimum purchase amounts reduce fees?
I have trouble with #4. I can see how a small mom & pop shop does not want people rolling in and using there cards on a stick of gum. And if small businesses like that are really trying hard to please the customer, and lets face it offering visa is a great convenience, I usually don't have a problem if they have a minimum purchase required to use that card.
However, I do think larger stores and gas stations should never be able to require a minimum purchase.
Oh and as for #1, the only place that has ever refused my unsigned card is the US Post Office, but only one location. I promptly went across the street and mailed the package with FedEx instead.
@freepistol: Stores like this try to impose a minimum because they are charged a flat fee plus a percentage of the transaction. For a small business this flat fee can range from 20-50 cents. That fee is significant if I buy a $1 chocolate bar on my credit card. It's technically against the credit cards policy, but I don't really see a need to report it as they're probably hurting as it is.
A local grocery store recently had a hand written sign posted on each of the registers stating that ID would be required to use a credit card. It seems that they had someone use a stolen card to charge (get this) $6,000 of items. Now I know that grocery prices are going up but really $6,000? I came home and printed out the relevant sections of both Visa and Master Cards merchant agreement. I then returned to the store and spoke with the manager giving him the printouts. He seemed to understand but wanted to justify the stores new policy. I politely stated, that should I observe, that they continued with the ID requirement I would have no choice but to report them to the card companies. When I left the store they were discussing the matter between the manager and supervisors. That was the 8th. I think that I'll go shopping today and see if anything has changed. BTW; I use cash when shopping with them.
@bostonhockey: Putting "SEE ID" on your card only works if the cashiers bothers to actually check. I worked as a cashier for over three years, and neither my fellow cashiers nor myself cared if you wrote "SEE ID." Unless you could give us a driver's license showing your name is SEE ID.
@AnderBobo: I agree - I'm willing to look the other way on the minimum transaction signs at local stores/restaurants as a courtesy to them. It's hard enough these days without having to give up 2-4% of your profit because I want to get 7 frequent flyer miles on a chicken parm.
I also don't have a problem with showing ID if someone asks. I know people around here get up in arms about it, but it's not a big deal to me. It happens a lot, too, probably because my signature is incredibly messy and only contains about 4 actual letters.
That's interesting that VISA has banned the pre-auth tip thing. Kinda cool.
Reporting vendors for item #4 is, in my mind, utterly worthless. Who has these minimum charges? Pretty much only small mom-and-pop type stores. The type that don't have a pot to piss in anyway. If everyone reports the Chinese takeout joint down the street for their $10 credit card minimum, here the possible outcomes:
1. Visa/MC/AMEX cancel the merchant agreement. Result - Now you can't use credit cards for ANY amount.
2. The vendor gets tired of the complaints and simply stops accepting credit cards. Result - Now you can't use credit cards for ANY amount.
3. The vendor capitulates and drops the minimum but raises prices across the board to compensate for all of the JIMI-carrying urban hipsters who insist on using plastic to pay for their $2 veggie fried fried rice.
None of these outcomes benefits me as a consumer. Unless "Big Credit" is going to start paying for reporting these violations, I can't think of many situations where I would report a vendor for this. I'm not going to do Visa/MC/AMEX's dirty work for them.
@mac-phisto - those complaint forms are useless. until the networks start enforcing revoking access & imposing fines, nothing's going to change.
I agree with you completely, these rules are pointless. Until we actually hear a story about a credit card provider going after a business by at least imposing a fine, we as consumers are still the female dogs of corporate America.
ive never signed the back of my card and have been using it for years. does that mean i can contest all my charges.
I recently told a merchant that they weren't allowed force an ID check and it was the most anxiety-causing action I've taken all year. I wish I hadn't done it.
I feel torn over #4. I know the CC company is really sticking it to the merchants, especially over small transactions, but it makes me angry seeing merchants breaking the rules.
If it's your favorite bagel shop, then give them a break and pay cash so they don't have to pay over $1.00 in credit card fees to sell you a stupid bagel and coffee.@Quatre707:
This is great for Visa and Mastercard, but what about other cards, ike Amex and Discover, or store-issued cards like our Wal-Mart card?