Avoid arbitration if you possibly can

Assorted credit cards

You'll almost certainly lose.

Almost every credit card agreement requires consumers to settle disputes through binding arbitration because the companies say it's cheaper and faster than going to court.

But Public Citizen says the cards hire arbitration firms that almost always rule in their favor.

The consumer advocacy group says arbitrators hired by MasterCard, Visa, Discover and American Express took the companies' side in 18,000 of 19,000 cases it recently studied.

All of the cases were from California because it's the only state that requires public access to the results of such disputes.

"This is a system that is unfair to consumers," says Joan Claybrook, the group's president. "People shouldn't have to give up their legal rights."

But that may not be the case for much longer.

Earlier this year, Minnesota Attorney General Lori Swanson filed suit against a major arbitration firm, the National Arbitration Forum, alleging that it had deceived credit card customers.

In July 2009, NAF and another large arbitration organization, the American Arbitration Association, said they would stop accepting credit card arbitration cases.

If credit providers remove mandatory mediation clauses from their contracts, consumers should have a choice: arbitration or taking the card company to court.

JPMorgan Chase said it will no longer pursue claims in arbitration, and Bank of America also said it will stop requiring that disputes be settled this way.

Not only can cardholders expect to get a fairer hearing from a judge, doing away with arbitration should make credit card issuers more willing to compromise and settle disagreements to avoid court costs and bad publicity.

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