With all the credit card bashing, much of it very justified, there are several circumstances when plastic trumps cash, check, money order or wire transfer. I want to be sure you know when this is the case.
There’s one key rule here. Use a credit card whenever you’re paying a deposit for something you will receive at a later date. Here are two examples to flesh that out.
The first comes courtesy of a Milwaukee Journal article I read about a furniture store that abruptly closed its doors. The furniture store business has been very unstable because it tracks the housing market. When housing went in the toilet, so too did the need for furnishing, carpet and the like.
So if you are ordering furniture and waiting on delivery, pay only by credit card. That way if the store goes bust, you can do something about it. If you don’t have your furniture within 55 days of making the purchase, you should dispute the charge before the 60th day arrives and you lose your right to dispute.
The second example has to do with people who are renting vacation homes, especially at resort locations. Not everybody out there putting a place up for rent online actually owns the place they’re renting. Or maybe they are the rightful owners but they’re facing foreclosure in the near future.
Don’t pay your deposit by check, money order, wire transfer or anything like that. A request for payment by wire transfer particularly suggests con artists may be at work. So I want you to pay only by credit card no earlier than 60 days before your arrival at the property. That’s how you protect your money.