One of the biggest arguments for using credit cards over other payment systems is that the cards supposedly provide protection from scams. It is important to know, however, that this protection often comes with limitations.
The protection of credit cards
Credit cards do often provide some kind of protection from scams and fraudulent charges. Credit card companies usually include fraudulent-charge protection. This means that any charge that you did not personally authorize could be taken off your card, and you are not liable to pay for the amount charged fraudulently. Some credit cards also offer protection from products or services that are faulty after purchase.
Trying to define fraud
Though credit card companies protect customers from fraudulent charges, some companies have different definitions of fraud. Some companies consider fraudulent charges to be any charge that was not authorized. Other companies consider fraud any charge that was initiated by a fraudulent circumstance. Still other companies consider any fraudulent charge to be a charge that is not fulfilled by the other half of the transaction. Each credit card agreement is different, and you should read the agreement fully before you sign up for a card.
When card companies may not protect
Credit card companies do not always rescind charges that could be, under some circumstances, considered fraudulent. If you choose to charge a large amount with a company that does not provide the product or service you are paying for, the credit card company can uphold the charges. In this situation, your only recourse is to try to recover the money from the company that essentially stole the money from you, which can take years of expensive legal battles. The more expensive the charge, the more likely the credit card company is to fight your efforts to rescind the charge.