charge disputeWhat happens when you fight a credit card charge? There are a variety of reasons for a charge dispute, from overcharges to broken or defective merchandise to, worst of all, fraud. Fortunately, you gain some powerful rights to combat these issues when you make payments with a credit card. That’s one of the reasons we so strongly recommend paying with credit. If you aren’t sure exactly how to go about disputing a charge on your credit card bill, this post is for you. We explain how the process works below, including which charges you can contest, how long it takes and what steps you need to take.

When can you make a charge dispute?

If you are dissatisfied with a product or service, the first step is to work with the seller to satisfy your complaints, which we will discuss more below. If that fails, thanks to the rights provided to you by the Fair Credit Billing Act, you may be able to call in your credit card issuer as an arbiter of the conflict. For the law to apply, the purchase must be at least $50 or have been made within 100 miles of your home. Note that these requirements may be waived if your card has zero liability protection. The issuer then steps in and evaluates whether the charge is wrong and, if so, provides you with a reimbursement for the payment, also known as a chargeback. The situations in which you can make a credit card charge dispute include:

  • Defective products — The product is broken or doesn’t work as advertised.
  • Undelivered products or services — The product never arrived, the promised service was never rendered, or you refused the service or product because it wasn’t what you purchased.
  • Inaccurate charges — There was a math error, you were overcharged or charged more than once for the same service.
  • Undelivered bills — While the business had your correct address on file, they sent the bill to the wrong address.
  • Unexplained charges — You can dispute the payment while waiting to learn the reason for the charge.
  • Unauthorized charges — Charges made without your permission or through theft of your credit card information.
  • Out of business — If you have an issue with a product or service, but the company that sold it to you has since closed, you can contact your credit card issuer to cancel or reverse the payment.


Of course, there are limitations to what you can dispute. If a product is as advertised, but you don’t like the color in person, that doesn’t make it defective – and, thus, your credit card issuer is unlikely to side with you in a charge dispute. Perhaps more surprisingly, a purchase may not be considered unauthorized if it was made by a member of your family or someone you previously authorized to use your credit card. That’s true even if you were unaware of or did not permit the purchase. However, for the most part, these categories are broad enough to give consumers protection from unreasonable charges.

How long do you have to file a credit card charge dispute?

According to the Fair Credit Billing Act, you have 60 days from the time you’re billed to when the issuer needs to have received your written notice. While that sounds like a lot of time, it can really fly by, both because you may not immediately notice the charge in your billing statement and because it takes time to gather your evidence and make an appropriate effort to work with the vendor. In addition to that, it’s best to start the process early because while credit card issuers are generally quick with these issues, it’s possible for a dispute to take a long time to close. That’s because the credit card issuer has 30 days to respond and a maximum of 90 days to investigate and resolve the issue. With that in mind, here’s how you go about contesting a payment.

Steps for filing a charge dispute

If it looks like fraud …

First things first, if the reason for the charge dispute is fraud or identity theft, rather than following the chargeback steps we’re outlining below, you’ll need to follow the steps to report identity theft. According to the Credit CARD Act, you can only be held liable for up to $50 if you report the fraud within 60 days. Many credit card issuers go beyond that and offer $0 liability benefits that protect cardholders from ever being held responsible for unauthorized charges. It’s best to contact your credit card issuer, the three credit bureaus, your local police department and the Federal Trade Commission as soon as you can when fraud is involved. Shortly after your credit card is canceled, you will be sent a new one. If fraud or identity theft aren’t the issue, move on to the charge dispute steps below.

Collect your evidence

If you want to be successful in your claim that a charge isn’t correct, you’ll want proof to back it up. For example, if you receive a broken product, you’ll want pictures. If a service didn’t match what you paid for, you’ll want a copy of the agreement and evidence of what you did receive. You should include this documentation in your explanation when you contact the vendor, and again if you send your bank a billing error notice.

Contact the seller

After you’ve determined what the issue is, it’s time to give the merchant a call. Since a vendor is likely to want to keep your business, maintain its reputation and avoid paying chargeback fees (usually $15 to $25), they are often amenable to resolving issues themselves. That’s even more the case if it was clearly an honest mistake.

So, if you see a double charge or overcharge, receive the wrong product, receive a malfunctioning product or insufficient service, reach out to the source and see if they will correct it. Phone calls are best for their speed, but you’ll also want to follow up by certified mail or email to build up documentation in case the merchant doesn’t follow through. If the vendor isn’t solving the problem quickly and you are concerned they will refuse to remedy the situation, move on to the next step. You may also want to move to the next step if you’re getting close to the 60-day deadline.

Contact your credit card issuer

If the merchant doesn’t resolve your problem, your credit card issuer is the next step. Again, you have 60 days from the when the charge is billed to contact your issuer, so make sure you don’t use up too much time corresponding with the vendor. Many issuers will honor reports made by phone or through your account, but the law specifically calls for notification by mail, so it is safest to follow up with certified mail. You can use the FTC’s sample letter as a template.

You aren’t required to pay the contested amount if you haven’t already; however, rest assured that you can also receive a chargeback if you’ve already paid. If you do make the payment, you won’t receive your money back until the credit card issuer finishes its inquiry and rules in your favor. If it’s feasible for you, it can be worth paying your statement including the contested amount, as while the charge remains unpaid, it will count against your credit limit and, should the issuer side with the merchant, you would have to pay any finance charges (or interest) that have accumulated on the amount. It should be noted that if your issuer sides with you and your statement has already closed, you’ll be reimbursed (via statement credit) for any interest charged on that purchase.

Wait for their resolution

As noted earlier, the issuer has 30 days to respond and 90 days to investigate and resolve the issue. During the inquiry, make sure you continue to pay any balances that aren’t contested so you don’t get penalized for making late payments. By the end of the investigation, the credit card issuer will either remove the charge, or they will decline the chargeback.

If your card issuer does refund you, they will likely then cancel the payment to the seller or seek reimbursement. The vendor can also appeal the decision. If they win, you would be charged for the originally contested amount.

Consider filing a complaint with the Consumer Financial Protection Bureau

If your charge dispute is declined or successfully contested by the merchant, you have one last step as an option. You can file a complaint about your credit card issuer’s management of the dispute with the Consumer Financial Protection Bureau (CFPB). Before you do so, you may want to reexamine your reason for refusing the charge and your evidence. If the credit card issuer declined your chargeback request, it’s possible that your case isn’t strong enough for the CFPB either.

Does a charge dispute affect your credit scores?

You might be wondering whether disputing credit card charges can affect your credit scores. In short, disputing a payment will not directly damage your credit scores. Even if you ultimately are required to make the payment, there isn’t a specific penalty associated with chargebacks, whether successful or not.

That said, there are a few ways that a credit card charge dispute can impact your credit. First, as mentioned earlier, the unpaid, contested charge will be counted against your credit limit. That means that it can affect your credit utilization ratio, as the amount of credit you are using will remain the same, but the amount available is decreased. If this raises your ratio, it may lower your credit scores, as typically a good credit utilization ratio is considered to be 30% or less.

The dispute could also show up on one or more of your credit reports as “in dispute” for the duration of the inquiry. Again, while this isn’t exactly negative, it can potentially prevent you from being approved for new lines of credit for the length of the dispute. To avoid any lasting damage on your credit, be sure that you pay for any charges that aren’t in dispute, as being delinquent on your credit card payments will definitely damage your credit scores.

For more information on credit cards, your credit scores and all things credit, visit our personal finance blog.