The usage of credit cards has seen a massive surge in the the last decade or so. Owing to its mobility and ease of use, credit cards are fast replacing hard currency as a medium of exchange to purchase all types of articles/services. The most alluring feature of a credit card as the name suggests is that it lets you buy things on a credit and payback on a monthly basis, either in full or as a part payment.
With international partnership networks such as Visa, MasterCard and Amex, transacting overseas or online is a cake walk since credit cards are accepted at millions of establishments worldwide. For someone who travels overseas frequently or buys products on the E-Commerce platforms, a card serves as a platform to buy in foreign currencies that can be easily converted into Peso at the day’s forex rate. However, it's not a fairy tale always. More often than not, you may encounter issues at the time of transacting or after, leading to a bad experience.
Let’s list some of the most commonly encountered issues that arise when you’re using plastic money and address them on how you can get into the action mode and resolve them in your favor without undergoing multiple hassles.
What Actually Happens: The merchant is swiping your credit card using the POS Terminal Machine to debit the required amount towards the bill. For some known/unknown reasons, the transaction does not go through since the server declines the transaction.
Reason: The most embarrassing of all the commonly encountered issues. Picture this. You’re shopping for groceries at a mall and have purchased a good amount of groceries for the month and the card is declined when you present it at the counter to the billing representative. The reason for being declined can vary from insufficient balance to early fraud detection by the bank’s system. The reason can also be issued with the bank’s services wherein the POS Machine is unable to communication with the centralized systems or connectivity issues.
How Does it Affect?
Apart from embarrassing you if you’re not equipped with alternate sources of bill payment, a decline can mean that you will not be able to transact further temporarily or for a certain duration. It immobilizes your card until further action from you or the bank.
Firstly, do not panic. Always have alternate resources such as cash or other cards. In most cases, you would have received an e mail and an SMS from the bank communicating the reason for decline as soon as it occurs. Contact the customer service department immediately for a resolution. In most of the cases other than insufficient balance, the issue can be fixed immediately over the phone. In the rarest of rare cases, you may be required to visit the nearest branch to further validate.
Credit Card Fraud
What Actually Happens: Fraudsters well acquainted with the system get access to your card details and make fraudulent purchases, mostly online by cloning the card number. Some of these transactions are of substantially high value such as air ticketing. The purchase amount is directly billed to your card, making it look like a transaction you’re liable for. Since Fraudsters have access to the card details, they end up washing out the balance by making more than a single purchase at one go.
Reason: In the wake of technological advancement, online sharks manipulate and use stolen information to easily hack into the systems and purchase products/services without actually paying for them from their own pocket. In most of the countries, such activities is considered unlawful with penalties and prosecution under cyber or civil laws.
How Does it Affect?
Prima facie, the transaction will be considered authentic and tagged to your account unless you raise an alarm with the bank immediately. Owing to a manifold increase in fraudulent activities, banks have deployed early warning systems that detect fraud and notify the dedicated team. However, some of them camouflage the systems and end up transacting successfully. As a responsible card user, you must periodically watch out for suspicious transactions and report the unauthorized ones.
Failing to do so can result in being held liable for payment of these charges which not only results in excess financial burden, but also has a bearing on your credit.
Report fictitious transactions immediately to the bank representatives over the phone as an immediate measure followed by a written complaint. Follow the instructions provided and submit the required paperwork. As an interim relief, the transactions under question are immediately credited on a temporary basis until further investigation to establish facts. Follow up regularly for an update and ask for written confirmation on progress and conclusion.
Also ensure, that any delay or non-payment of the outstanding balance is not incorrectly reported to credit rating agencies.
Payment Gateway Errors
What Actually Happens: This issue is mostly encountered when the credit card is being used online, over the internet to make a purchase. Since payments are processed over secure third party gateways engaged by the banks, there can be an error of unsuccessful processing due to technical reasons owing to the sophisticated systems. In most cases, the payment gets debited from your credit card but the end result may be a failed payment due to which the order in question is not successfully placed.
Reason: Mostly due to technical errors such as communication with the various servers involved in the process or a glitch at the bank’s end.
How Does it Affect?
The payment receipt fails at the originating source or during one of the multiple processes due to which the order is not successfully placed with the seller. In most cases, monies are debited from your credit card account which may lead to a frustrating experience. On the flipside, such issues are not something you should worry about since monies are instantly credited back into the card account if there is a failure.
Be patient and do not panic. As stated earlier, most of such issues are auto rectified. If you do not see any progress in your favor, ascertain where the problem started and contact the required stakeholder such as the merchant or the bank. If not immediate, you’re sure to receive a credit as per the timelines. In rare cases, if your case is genuine and does not work in your favor, lodge a dispute with the bank by writing to them.
Incorrect Amount Billed
What Actually Happens: A situation where the merchant(online or offline) charges an amount in excess of the actual price of the product/service leading to breach of trust and unwanted hassles.
Reason: Mostly, it would be a case of system glitch in case of an online purchase or a manual error if you’re buying over the counter unless the merchant has vested intentions of charging an excess amount.
How Does it Affect?
Unwanted mental stress to begin with. You feel cheated since the charge was not something that was promised for the product. You may end up incurring additional charges due to an incorrect transaction, specially if it's a massive difference.
Verify the amount charged against the bill and if there is a definite discrepancy, speak to the merchant and ask for a credit through alternate sources. If the merchant is not co-operating, call the customer service department of your credit card issuer immediately to lodge a formal complaint and follow up until complete resolution in your favor.
Incorrect Fee Charged
What Actually Happens: The credit card issuer(bank) charges a fee on the card without outside the agreed contract or without notifying well in advance. Eg: Annual Fee when the card was free for life.
Reason: Owing to system glitches or incorrect information on the database. This issue can attributed to human errors such as coordination between various departments at the bank.
How Does it Affect?
You will end up incurring charges/fees on your account adding on to the outstanding balance, making you liable to pay them despite being not aware of these charges. It may also create unwanted mental stress in terms of following up to investigate the backdrop of these charges.
As soon as you spot this charge on your account/statement, contact the bank immediately, preferably over the phone and express your disagreement. If there was a documented mediation with the sales rep on exclusion of specific types of fees, quote the instance and provide the proof, if required. As always, follow up at regular intervals until reversal of the fee/charge if it's not justified.
Credit cards are a great medium to pay for your favorite product/service and comes with convenient and pleasing benefits. On the flipside, you may encounter issues that may take a toll on you or make you reconsider your decision of having a card. The bottom line is to monitor the account/statements regularly and raise a flag if something goes wrong.
If you’re someone new to the world of credit cards and looking forward to signing up for one, look forward to a plethora of options in Philippines. Indigenous and Multinational banks in the country offer cards based on specific needs. Make sure you compare the rates, features and charges before making a choice. BankBazaar.ph eases your efforts to compare cards from various banks, thereby heliping in making decisons faster.