Credit Card Refund of Credit Balances

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 What Is Credit Card Debt?

Credit card debt is money that an individual owes to a credit card company. It is very common for Americans these days to have credit card debt.

It can also be very easy for an individual to get in over their head by having more credit card debt than they are able to pay. In some cases, if an individual pays off their credit card debt, they may have a credit balance on their account.

What Is a Credit Balance?

Under consumer credit laws, a credit balance is money that is owed to the individual as opposed to a balance the individual owes to the credit card company. A credit balance may be left on an individual’s account if they return merchandise or if they pay more than they currently owe on their credit card.

What Can I Do if I Have a Credit Balance?

If an individual has a credit card balance on their account, they may be able to:

  • Keep the credit on their account and apply it towards future charges; or
  • Request a credit card refund check.

If the credit balance on the account is less than one dollar, a credit card company is not required to send the individual a refund, even if they request one. If the credit balance remains on the account for more than 6 months, the credit card company is required to make a good faith attempt to refund it to the individual.

How Do I Request a Refund on a Credit Balance?

The majority of credit card companies will send an individual a refund if they simply call and request a refund of credit balance on their credit card.

Another option an individual may use is to write a letter to their credit card issuer, addressed to the correspondence address of the company and not the payment address, and request a refund check.

How Long Will it Take for Me to Receive My Credit Balance Refund Check?

In general, an individual will receive their credit balance refund check within 10 business days. If the individual requested a refund check by mail, their credit card company is required, by law, to mail it to them within 7 business days of the receipt of the request letter.

If the individual has a large credit balance, the credit card company may take some extra time to verify why there is a large credit balance prior to issuing the refund check.

What if the Credit Balance Is Due to an Error?

On occasion, a credit balance will appear on an individual’s account because of an error made by the credit card company. These types of errors may be caused by many factors, including:

  • The credit card company erroneously applied a payment more than once;
  • A merchant credit was erroneously posted twice; or
  • Another cardholder’s payment was applied to the individual’s credit card account.

If a credit card company erroneously applied a check and that money was deducted from their checking account for more than they paid, the credit card company may wire the overpayment back to the individual’s bank account.

What Is a Credit Dispute?

Credit disputes typically occur when one party, a lender, has loaned another party, a borrower, money that they are able to use. This money is usually referred to as a credit line.

Credit lines are most frequently associated with credit cards. Borrowers are required to pay back the amount that they have borrowed in addition to an amount of interest that is charged by the lender.

In the majority of situations, payments are made on a monthly basis. Credit disputes can arise for a number of reasons if there are disagreements between a lender and a borrower.

For example, disputes may arise if a borrower is not willing or not able to keep up with their loan payments. A credit dispute may arise under a body of laws called credit laws.

Credit laws are a category of federal and state laws that aim to regulate issues that range from financial charges to extending a pre-established line of credit. If a financial institution or company is in the business of lending money or offering credit lines to customers, they will most likely be required to comply with certain credit laws.

The Fair Credit Reporting Act (FCRA) is one such federal law that protects consumers from credit reporting agencies. The FCRA grants a consumer the right to request a copy of their credit report.

It also allows a consumer to challenge an error found within their credit report that may potentially prevent them from obtaining financial items related to their credit, such as credit cards or loans.

What Are Some Common Credit Disputes?

There are several different forms of credit disputes that may arise, including:

  • Overspending, also called maxing out a credit card, resulting in debt;
  • Insufficient funds;
  • Credit card fraud;
  • Other types of fraud;
  • Disputes regarding interest rates on credit loans;
  • Disputes involving non-payment of loans; and
  • Denial of an individual’s application due to bad credit, such as:
    • a housing application;
    • a loan application;
    • financing; and
    • other types of credit based applications.

In many of these types of cases, the terms of a credit loan can be negotiated. This may include repayment schedules or interest rates.

In the majority of situations, credit card companies are willing to adjust their terms to a specific request from a borrower. However, a major violation or shortcoming made by either of the parties may lead to legal action.

What Are Some Remedies for Credit Disputes?

Credit disputes may lead to lawsuits between lenders and borrowers. The remedies for a lender may include placing a lien on the borrower’s property.

That property may then be transferred to the lender. The borrower’s property can also be sold and the profits earned be paid towards their missed payments.

For borrowers, the remedies may include a damages award for any losses that were caused by the violation by the lender. A borrower’s remedies may also include an injunction that allows the parties to edit or rewrite an existing lending contract.

Can I Be Sued for Credit Card Debt?

If an individual falls behind on their money payments or they stop making payments at all on their credit card, the credit card company can file a lawsuit against them. A credit card company can take this action under the Fair Debt Collection Practices Act.

Before filing a lawsuit, the individual’s credit card company will typically disable or close the account. During this time, interest charges will continue to be added onto the debt that the borrower already accrued on the credit card.

Do I Need a Lawyer?

If you are having issues obtaining a credit balance refund on your credit card account, you should consult with a credit lawyer. Your lawyer can advise you regarding the applicable consumer credit laws and regulations as well as advise you of your rights and any available remedies.

If you have a credit amount on your account that you believe to be yours and your credit card issuer refused to return it, your attorney can work with the credit card company to help resolve the issue and obtain your refund.

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