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Always Check Your Credit Card Statements

Last month I explained the importance of reviewing your finances regularly [3]. Today, I want to amend that post and warn that you need to check your credit card statements every single month. Check in on your finances “regularly,” be it a month, a quarter, or semi-annually; check your statements every single month.

Here’s a harrowing tale of how Dan Godding, of Loveland, Colorado, is on the hook for $11,000 in fraudulent charges [4] because he didn’t review his statement. Since he continued to make payments on the debt, and Bank of America’s fraud department failed to catch it, the charges are considered legitimate.

In our Foundation post on Credit Cards [5], we learned that the Fair Credit Billing Act protects consumers against fraud. If you discover your card missing and report the loss, you are at most responsible for $50 of loss (most issuers offer $0 liability, meaning you are responsible for nothing). If there is a fraudulent charge and you haven’t physically lost your card, you can report it and you are still responsible for, at most, $50.

The mistake, in this case, was that Godding made payments on the debt, thus validating it. The lesson here is that you should always check your credit card statements, and any other statements, for fraud. It takes no time at all and fraudulent charges will almost jump off the statement at you.

(Photo: restlessglobetrotter [6])