The Chargeback Advantage: Why You Should Almost Always Pay with Credit Cards

By Eli Waldman

Senior Customer Success Manager

If you just want to buy a candy bar at the corner store, the person behind the counter may balk if you put down a credit card. While it is true that small purchases and special circumstances are best suited for cash or another payment method, there are compelling reasons why consumers should take out the plastic for the majority of purchases. 

People used to be wary of credit cards, particularly online. However, credit cards are not only not the riskiest form of payment for consumers but may actually be among the safest. Unauthorized transactions or merchant disputes can result in chargebacks and a reversal of charges to the customer. Bank wire recalls and crypto recovery on the blockchain can be more complex. 

There are other advantages to using credit cards, including convenience, the ease with which consumers can track purchases and deals and discounts offered by credit card companies. When it comes to security, credit cards make reversing charges and refunds easier. The consumer needs to make a solid case to an issuing bank that a chargeback is justified. In this process, a financial service offering fund recovery can help clients get their funds back

MyChargeBack experts provide guidance to consumers who are trying to recover their funds from broker or merchant disputes or fraud. Talk to MyChargeBack and be fully prepared to present your claim in the fund recovery process. 

The Perks of Using a Credit Card

Compared to cash and checks, the advantages of using a credit card are substantial. There is no need to carry a bulky wallet or to be worried about having bills blow away in the wind or that you will be pickpocketed. In general, it is easier to secure a plastic card than bills and coins. 

Additionally, tracking transactions is easier using a credit card. Customers receive statements online or in the mail. They can also call up the credit card company to confirm the transaction history. People who use cash need to write down their transactions individually and often are not exact with amounts. 

Credit card companies like to encourage people to use their cards by offering them discounts for purchases. Every company has its own perks, but it definitely beats paying in cash and checks, unless, of course, consumers are making purchases they otherwise would not make to reap these benefits. 

One of the main advantages of using a credit card is they tend to be beneficial to the customer if something goes wrong. Unauthorized charges and merchant disputes can be resolved through the chargeback process, which results in a reversal in funds to the consumer more often than bank or crypto transactions. 

Fund Recovery and Chargebacks

It wasn’t long ago that many consumers thought of using a credit card as risky and cash as a safer bet. Of course, cash could get stolen, but people were concerned that waiters in restaurants, for example, would steal their credit card data (which can happen). In the early days of the internet, only the boldest consumers would dare use their credit card online and some people are still wary about using their credit card on the internet. 

The worst can happen and often does. Many of us have had the experience of seeing unauthorized charges on our credit cards. Credit cards can be lost or stolen and our numbers can be used for purchases made by others. 

However, if this happens, the chargeback process is often fair to the consumer. The customer has many weeks to file a claim and if they can prove that charges were unauthorized, the issuing bank will usually reverse the charges. 

Chargebacks are also useful during merchant or broker disputes when the customer feels the item or service they received was not the one that they paid for. These chargeback disputes can be ongoing and involve the customer, issuing bank, the acquiring bank, and the merchant. However, the claims of the customer are analyzed in-depth and if there is evidence, taken seriously. 

Banks are often fair to consumers as well, but it is much harder to reverse a bank wire transfer than it is a credit card purchase. A customer can request a wire recall, but the transaction can only be reversed when it is in process and not completed. Once the wire transfer has actually happened, there can be no reversal. The customer has to ask the merchant for a refund. 

This can be difficult if there is a dispute between the merchant and the customer. If the customer feels the merchant is fraudulent they can request a temporary freeze on the funds or a hold on the merchant’s account. Banks, understandably, are not quick to do this, and the customer needs substantial evidence. Usually, they need backing by  law enforcement.

There is no concept of a chargeback on the blockchain to reverse crypto transactions. Every transaction is recorded on the blockchain and none can be reversed. To obtain a refund, the customer has to ask the merchant to return the money. If there is a dispute or if the merchant or broker is dishonest, the chances of getting money back directly from the merchant are slim without a fund recovery service. 

What Is the Chargeback Process Like? 

Among the many benefits of credit cards, it is easier for consumers to get their money back if something goes wrong. The customer has several weeks to over a month to file a chargeback claim. If the issuing bank accepts the claim, they will forward it to the acquiring bank and inform the merchant. The merchant has a few weeks to respond to the claim. After that, the issuing bank will make a decision. 

There is a similar process with online payment platforms. For instance, there is a PayPal chargeback, but usually, the process is decided much more quickly than with a credit card chargeback. The rapidity is not always to the advantage of the customer. The decision is made through a private company, PayPal, rather than a bank, which is governed by consumer protection regulations.

How Likely is a Customer to Win a Chargeback Claim? 

Customers have in the past had a good chance of winning a chargeback claim. However, chargeback fraud or the abuse of the chargeback process by consumers to get items for free is a growing problem, and issuing banks are quicker to reject claims than in the past. Therefore, evidence and the right presentation of claim are crucial for chargeback success. 

How a Fund Recovery Assistance Will Help

Fund recovery assistance from a financial services firm will ensure your claim will be taken seriously by issuing banks. MyChargeBack has extensive experience guiding customers through the chargeback process and has contacts with hundreds of banks. We can bolster your claim and facilitate your retrieval of funds.