Which card will do nicely in a dispute?

Credit card firms fall over themselves to offer low interest rates and perks, but it is worth checking the small print to discover what other types of customer services they offer.

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Credit card firms fall over themselves to offer low interest rates and perks, but it is worth checking the small print to discover what other types of customer services they offer.

Cahoot is grabbing headlines by offering 0 per cent annual percentage rate (APR) until next June to the first 25,000 customers who apply for a card. Low introductory rates are common. RBS Advanta and HFC's Marbles both charge an introductory rate of 4.5 per cent. Those who clear their balance every month, looking for perks rather than low interest rates, can get cashback with Alliance & Leicester, Morgan Stanley Dean Witter (MSDW) and Egg.

What card providers don't often draw to your attention is what happens when things go wrong. Good customer service is crucial - just as important as any loyalty scheme or introductory offer. So what level of service should you expect?

One of the most common mistakes affecting accounts is the duplicated transaction - for instance, a purchase from a shop or meal in a restaurant gets rung through twice, and you are charged double. While this often happens accidentally, in some cases transactions you have never made appear on your statement through fraudulent use.

Generally, you do not have to worry about evidence of fraud as your credit card provider will pursue the matter on your behalf. But even though Visa and Mastercard set guidelines, there is no uniform policy, and the procedure varies with providers. The trouble is that if your card provider happens to be one that is not good at resolving a query, you are unlikely to find out about this weakness until a mistake does occur.

If you spot a duplicate transaction on your statement and you possess a NatWest, Abbey National, cahoot, Egg, Goldfish, Marbles or GM card, you will just need to notify the card issuer who will sort it out and then credit your account.

However, if you have a Barclaycard, HSBC or Tesco credit card, you must report the problem first. They will only sort it out after you have filled in the dispute form that they sent out to you.

Holders of the MSDW credit card could well face the worst problems. If you have one of these cards, you will be asked to return to the place where the transaction occurred - whether it be a shop, restaurant or cinema - and ask for your card to be credited with the amount that you've been overcharged. In practical terms, this is not always possible of course; so, if the transaction was made abroad, for example, MSDW will pursue the matter for you. But otherwise, they will only take up your case if you object strongly to them or if the merchant refuses to refund your card.

Credit card fraud cost issuers £189m last year, and this figure is expected to double in the next two years. The good news is that should you become a victim of fraud, your credit card company will ensure you are not left out of pocket.

It is vital that you check your statements carefully, and if you see anything that may be fraudulent, inform your credit card company straightaway. Once you have reported a fraudulent transaction, the card issuer should investigate it for you. While this is happening, the queried amount is frozen, so no interest will accrue. If there is a fraudulent transaction, the amount will be credited to your card and your provider will swallow the cost.

While we seem willing to give credit card details over the telephone, many of us are concerned about passing such information over the internet, despite the fact that most websites are secure. Credit card companies are aware of this reluctance, so many of them have an internet guarantee to reassure customers about the safety of buying online.

Marbles has gone one step further. Its customers do not need to give a credit card number over the internet; instead buyers can request a 16-digit number for each online transaction. This number will be recognised as valid by online retailers, Visa and Mastercard. American Express Blue card recently issued an online fraud guarantee ensuring that cardholders will not be held responsible for unauthorised charges made with their card.

If you buy something over the internet, be sure you shop only on secure sites. Be aware of sites that charge a monthly subscription to get access.

People's Bank reports that its biggest complaints are from customers who did not realise that when they gave their credit card details to access a site they were signing up to a regular subscription, which of course is not fraud.

While you need to be careful about how you use your credit card, buying on credit is advised if you are purchasing an expensive item such as a computer or a holiday. If you pay with a credit card you are covered by section 75 of the Consumer Credit Act. Should you have a contractual dispute or a refund request that you then find the supplier refuses to settle, the credit card company can sort it out for you.

Other forms of protection may also be available - such as payment protection and extended warranty as standard. Usually there is some travel accident insurance too, although this is not an alternative to getting general travel insurance. Gold and platinum cards will offer more protection than standard cards. It is worth checking your policy to see what extra cover you have.

* Contacts: Alliance & Leicester, 0500 838383; American Express, 0800 700111; Barclaycard, 0345 660758; Cahoot, www.cahoot.co.uk; Egg, www. egg.com; GM Cards, 0345 462777; Goldfish, 0800 609060; HSBC, 0870 535 3344; Marbles, www.marbles.com; MSDW, 0800 917 1333; NatWest, 0800 616848; People's Bank, 0500 551055; RBS Advanta, 0800 077770; Tesco, 0800 406050.

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