I’m not a big fan of taking a microscope to my monthly bills. It’s tedious, tiring and I’d rather spend the time with my family and friends.
But give me a chance to save money by keeping tabs on my credit card statement, and I say: Where do I sign up?
Make no mistake, reviewing your bills and your card statement is a big deal. Many people don’t do it. I came back from Cabo San Lucas, Mexico, recently. It’s a great place with nice weather and a swell hotel, the one and only La Pamilla, where I bought some tequila at the duty-free shop. When I checked the bill I saw that the clerk had charged me $600 for the tequila. I realize that it was Milagro Anejo, a top-shelf brand, but that’s a little ridiculous.
Turns out they charged me in pesos. I'd like to think it was an innocent mistake (and certainly not mine because I was buying the tequila, not quaffing it). But my card issuer communicated the amount in dollars and now I’m having them check it out.
If I hadn’t checked the bill, I never would have found the discrepancy.
That’s why I’m doing a two-part column on reviewing your credit card statement. In a tough economy, it’s critical that we check our bills and statements to save as much money as we can. One U.K. study says that consumers lose 10 billion pounds (that's around $14 billion U.S.) every year due to overcharges on bills such as phone and credit card statements. Another U.K. study, by MoneySupermarket.com, says that more than a third of Brits got an incorrect household bill in 2008. Even so, the study claims that half of those surveyed said they don’t review their bills and statements.
Fortunately, checking your bills and statements and correcting the errors you find is highly doable. You just need to know where to look and what to do when you find a mistake.
Let’s give it the Cramer treatment and work it out.
1. Know the laws. Before you take the magnifying glass out, know that Uncle Sam has your back when it comes to getting clean bills and statements. While each state has its own set of laws on statement errors, the Fair Credit Billing Act is a pretty big hammer. The law mandates that businesses correct errors and overcharges on bills fairly and promptly. The act also covers a lot of ground. Unauthorized charges, over-billing, refusal to cancel accounts and wrong amounts charged are all covered under the Fair Credit Billing Act. I’ll write about the FCBA more thoroughly down the road, but for now, the Federal Reserve has a good explanation.
2. Know your statement. You can’t make use of the Fair Credit Billing Act if you don’t review your statements and you can’t review your statements if you don’t know what you’re looking for. Credit card statements, for example, are fairly uniform, providing information on dates of purchase, the price you paid for a product or service, and the name of the business from which you made your purchase. I like to save store receipts and compare the charges from my purchase to the actual charges on my credit card bill. You’d be surprised how often you find a discrepancy, or worse, a double-charge.
3. Know about potential late charges. To avoid late fees, check the dates that your bills are due and be vigilant about paying before that date. If you can’t pay on time, call ahead and ask the business to waive the late fee, then agree to pay the bill upon a fixed date. Consumers often shrug their shoulders when it comes to late fees, paying them without complaint, not knowing they have a good chance of getting late fees waived if they call the business in question and ask that the fees be removed. Remember what happened to me and my Target card. This is serious business.
