If you’ve spotted something suspicious on your bill, you’re not alone. With Americans disputing a staggering $83 billion in charges in 2024, knowing when and how to dispute a charge has become an essential financial skill.
In this post, I’ll walk you through the legitimate reasons to dispute a credit card charge and share the exact steps to take when you need to contest a transaction. Whether you’re dealing with fraud or a merchant who didn’t deliver as promised, understanding the credit card dispute process can save you money and headaches.
Understanding Credit Card Disputes: The Basics
Before diving into specific reasons to dispute a charge, let’s understand what we’re talking about. A credit card dispute (also called a chargeback) happens when you ask your credit card company to reverse a charge that’s already been processed.
The average disputed transaction is around $76, and the typical cardholder disputes about 5.7 transactions per year. While that might not sound like much, these disputes add up to billions of dollars annually.
Interestingly, about half of consumers choose to dispute charges through their banks rather than contacting merchants directly. Why? Because banks typically resolve these issues faster than merchants do.
7 Valid Reasons for Credit Card Disputes
1. Unauthorized Charges and Fraud
This is the most common and clear-cut reason to dispute a charge. If you see a transaction you didn’t make, act fast! Around 44% of U.S. consumers have contested purchases due to fraud.
Signs of unauthorized charges include:
- Purchases from stores you’ve never shopped at
- Transactions in cities or countries you haven’t visited
- Multiple small charges (fraudsters often test cards with small amounts first)
- Charges that appear at odd hours when you weren’t shopping
2. Items or Services Not Received
I ordered a new laptop online last year, but it never arrived despite the charge appearing on my statement. This is a perfectly valid reason to dispute a charge.
You can dispute charges when:
- You paid for an item that was never delivered
- You signed up for a service that was never provided
- The delivery deadline passed with no communication from the seller
Always try contacting the merchant first, but if they’re unresponsive, a dispute is your next step.
3. Receiving Defective or Not-as-Described Items
Have you ever received something that looked nothing like the online pictures? Or maybe it arrived broken or missing parts? These situations qualify for disputing credit card charges legally.
Before filing a dispute:
- Document the issue with photos
- Contact the seller with evidence of the problem
- Give the merchant a reasonable chance to resolve the issue
4. Double Charges and Billing Errors
Credit card billing errors happen more often than you might think. I once got charged twice for a hotel room, and a simple dispute fixed the problem.
Common billing errors include:
- Being charged twice for the same purchase
- Being charged the wrong amount
- Math errors in calculating your bill
- Charges for returned merchandise
5. Cancelled Subscriptions That Continue to Bill
We’ve all signed up for free trials that mysteriously turn into paid subscriptions. If you’ve cancelled a subscription but continue to see charges, that’s a legitimate reason for a credit card error dispute.
6. Failure to Process Refunds
Have you returned an item but never seen the refund hit your account? This happens frequently and is one of the most frustrating charges to dispute on credit card statements.
Always keep:
- Return receipts
- Confirmation emails
- Tracking numbers for returned items
These will be invaluable if you need to dispute the charge.
7. Quality Issues with Services
If you paid for a service that was performed poorly or not completed, you have grounds for disputing unsatisfactory services charges.
For example, if you hired a plumber who left the job half-finished or a landscaper who damaged your property, you can dispute the charge after attempting to resolve it with the service provider.
The Credit Card Dispute Process: Step by Step
Now that you know the valid reasons for disputing a charge, here’s how to actually do it:
1. Gather Your Evidence
Before contacting your bank, collect:
- Your credit card statement showing the charge
- Receipts or order confirmations
- Any communication with the merchant
- Photos of damaged items (if applicable)
2. Contact the Merchant First (In Most Cases)
Unless you’re dealing with fraud, try resolving the issue directly with the merchant. This can be faster than a formal dispute, and many companies will work with you to avoid the chargeback process.
3. File the Dispute with Your Credit Card Company
If the merchant doesn’t resolve your issue, contact your credit card company to initiate a dispute. You can usually do this:
- Through your credit card’s mobile app
- Via the credit card website
- By phone (the number on the back of your card)
- By mail (though this is the slowest method)
The Fair Credit Billing Act gives you 60 days from the statement date to dispute charges, so don’t delay!
4. Follow Up and Provide Additional Information
Your credit card company may request additional documentation. Respond promptly to keep the process moving.
5. Wait for Resolution
The credit card billing dispute process typically takes 30-90 days to complete. During this time, you usually don’t have to pay for the disputed charge while the investigation is ongoing.
The Rising Cost of Disputes (For Businesses and Consumers)
It’s worth noting that the average cost of handling disputes increased by 16% in 2023 alone. For businesses, chargeback fees range from $10 to $50 per dispute, not counting the lost merchandise and shipping costs.
This explains why some companies are becoming more stringent about their return and dispute policies. As a consumer, this makes it even more important to have valid grounds and good documentation when disputing charges.
First-Party Fraud: A Growing Problem
While legitimate disputes are your right as a consumer, it’s important to mention that first-party fraud is becoming a serious issue. Approximately 26% of consumers have disputed charges to get refunds despite having received the goods as ordered.
This practice, sometimes called “friendly fraud,” is more common among younger generations. But make no mistake – it’s not actually friendly. It’s a form of fraud that drives up costs for everyone and can result in penalties if discovered.
When to Dispute vs. When to Accept the Loss
Not every unsatisfactory purchase warrants a dispute. Before filing, ask yourself:
- Was the issue significant? (Minor issues might not be worth pursuing)
- Did I give the merchant a fair chance to make it right?
- Do I have evidence to support my case?
- Am I within the 60-day timeframe for disputing?
Sometimes, accepting a small loss and learning from the experience is more practical than going through the dispute process.
Understanding when and how to dispute credit card charges is an important financial skill in today’s world. With the average person disputing nearly six transactions annually, knowing your rights and the proper procedures can save you money and stress.
Remember that the dispute process exists to protect consumers from fraud and unfair business practices. Use it when necessary, but always start by trying to resolve issues directly with merchants when possible.
Have you ever had to dispute a credit card charge? What was your experience like? I’d love to hear your stories in the comments below.
Frequently Asked Questions
What are the most common reasons to dispute credit card charges?
The most common reasons include unauthorized transactions (fraud), not receiving purchased items or services, receiving defective merchandise, being billed incorrectly, and continuing charges after cancelling subscriptions.
What are considered valid credit card dispute reasons?
Valid reasons include unauthorized charges, billing errors, failure to deliver goods or services, defective items, misrepresented products, cancelled recurring charges that continue, and refunds that were promised but not processed.