How can I protect my credit rating when my auto-pay wasn’t cancelled?
Financial Post · Mary Castillo ·
FP Answers: Many people assume that filing a credit card dispute puts payments for the disputed charges on hold, but that is not usually the case
Q: We had a duct and fireplace cleaning contract, billed to my credit card every month. The company was sold, the service slipped and I cancelled. I have written confirmation that the auto-pay was stopped, but the charges kept coming. It’s been six months now, and I’ve filed a dispute every month. The company won’t return my calls and my credit card company told me to sort it out with them. I don’t want to pay the charges because I don’t feel I owe them, but now my credit score is going down. How do I get out of this endless runaround? —Dale
FP Answers: It is understandable that you are reluctant to pay charges for a service you cancelled, and that you are becoming concerned about the effect on your credit score. However, while you wait for a resolution, your priority needs to be managing the disputed debt in a way that protects your credit.
Many people assume that filing a credit card dispute puts payments for the disputed charges on hold, but that is not usually the case. Unless your card issuer has confirmed otherwise in writing, continue making at least the minimum payment required on your statement by the due date. If you normally pay your card in full, doing so will prevent interest from accruing on the disputed charges. Missed minimum payments can damage your credit score and remain on your credit report for up to six years.
Read the full story at Financial Post · All coverage of this story