So you bought an awesome thing-a-ma-jiggy or service with your credit card. But when you got it home you discovered the item doesn't work, the service was a heist, or the mail-order loot never arrived or it was the wrong item entirely. And now the merchant is not co-operating. Are you still required to pay off the item charged to your credit card?

The simple answer to this question is "no". However there are some hoops to jump through before you can ignore paying off that item and expect not to deal with ensuing interest charges, fees, and ultimately credit score problems.

Federal law actually gives you the right to withhold credit card payment for defective products and services. Here are the rules:

• You must have a legitimate complaint about the item or service.
• You must make a good-faith effort to resolve the problem with the merchant directly. They must have refused to replace, repair, or otherwise resolve your problem (and keeping documented records of these attempts is highly recommended).
• You must explain to the credit card company in writing what the situation is and your intentions of withholding payment on the item. Keep copies of all correspondence.
• You can only withhold payment on the cost of the item (you can't get off the entire month's charges scott-free).
• The item or service must be worth more than $50.
• You must have purchased the loot in your home state or within 100 miles of your mailing address. (This gets sticky for mail ordered-goods, since the warehouse address may be within your state or 100-mile limit, but the merchant's processing office may not be).

Word to the Wise: Double Check Your Credit File

Although you are federally given the right to withhold payment under the above circumstances, the credit card issuer may still (negligently) file a report to the credit bureau regarding the outstanding balance, or fail to report that you disputed the charge or that the dispute was eventually resolved.

So check your credit report to ensure this information is correct and up to date once you have resolved a dispute.

Despite the red tape to sift through, this is yet another reason why using credit cards for purchases can actually be a good thing when done responsibly and diligently. Hopefully you will never have to endure the process above, but at least it is good to have options.