Let’s say you use you Sears store credit card to buy a toaster for $45 from a near by Sears store. When you get home the plug the toaster in, it explodes. You take it back to the store, but they refuse to replace it or credit your account. Can you refuse to pay the bill for the toaster when it comes? Yes.
Under the Fair Credit Billing Act, if you buy defective merchandise with the store’s own credit card, you do not have to pay the balance. Before you can do this, though,, you must make an honest, good faith attempt to return the product or to settle the dispute with the store that sold if to you.
If you had bough the toaster with, say, your MasterCard or Visa, the outcome would have been different. When you use a credit card other than one issued by the store, you are not required to pay for a defective product only if the product cost more than $50 and the sale took place in the state in which you live or within one hundred miles of your home if the store is in another state.