I work at a credit union. Let me offer a few pieces of advice - find out the exact procedure of your bank. Some will put those charges on hold until the dispute is settled and then decide whether or not to take them off, some will make you pay for them first and then credit you back...
The card should be canceled, any recurring charges on your card should be notified (like if you have AOL or your energy company whatever charging the card every month) and either cancel the auto payment or give them the updated card info if you already have it. It may be too late for the last monthly payment to be canceled, be prepared.
You most likely will have to fill out paperwork, have it notarized, and possibly provide them with copies of receipts or other documents... and possibly an official written letter of dispute. Every place is different.
The main thing is, that there are a lot of steps and there are a lot of ways things can go wrong... so just make sure you are well informed, follow the steps, keep copies of EVERYTHING, write down names and extensions of people you talk to at the bank, in other words CYA! And if at all possible, when returning the documents, if you can't go into a branch and do it in person, you should have them fedex'd or sent by usps using a return receipt or confirmation of delivery. The last thing you need is to do all this and have them lose it, and trust me it can happen!
I definitely recommend that you flag your credit report. You can go online to their websites and either print out a form and mail it, or on some of them you can just fill and submit it online. The sites are just expeian.com, transunion.com and equifax.com
I suggest you submit under all three, though they say that all will be notified if you notify one... better safe than sorry and it can take anywhere from 30 to 90 days for them to share information.
I hope this helps. Good luck.