Warning: Late repayments can cause you serious money problems. For help, go to moneyadviceservice.org.uk

Credit Card Protection: Explained

Divider

There are so many benefits to using a credit card, one of which is credit card protection. However many of us don’t fully understand or use these safeguards that free.

Under Section 75 of the Consumer Credit Act, your purchases are protected by your credit card provider. But what does this really mean? And are you safer paying with a credit card than with cash or a debit card?

Here’s credit card protection explained:

Section 75 of the Consumer Credit Act

In a nutshell, this law means that if you purchase anything such as a laptop or a holiday between £100 – £30,000, your credit card company is as liable as the company from where you’ve bought your product if it is faulty.

You’re covered in the following circumstances:

Fortunately, you do qualify for reimbursement even if you make a part payment for a purchase with your credit card. So if you paid a £30 on your deposit credit card and another £300 on a debit card you would be able to claim for the full £330.

Chargeback

Chargeback also allows you to try to recover purchases under the £100 limit and is available on debit cards and credit cards like Visa, Amex, Maestro, and Mastercard. However this is what’s known as a ‘Scheme Rule’. So it is not legally binding, unlike Section 75. For this reason, you are better to claim on Section 75 if you have spent over £100.

When Do You Not Qualify for Section 75?

There are certain requirements to qualify for this act, for example, the individual item you have bought must be over £100, rather than the total bill. For example, if you purchased a return plane for £120 you would be eligible. But if you paid £60 each for one-way tickets then you would not qualify.

Use this page to find out how to claim your credit company.

As always, making payments with credit cards can be very beneficial for your finances such as protecting your money and managing your outgoings to spread the cost of expensive purchases. But it is important to use credit cards responsibly and create a sustainable budget that you can stick to so that you can avoid potential financial difficulties in the future.

young woman using a credit card

Other Options

If credit cards aren’t for you, there are many other borrowing options available. 

If you’re looking to get an instant loan online, My Financial Broker can help! We work with a number of direct loan lenders offering both payday and instalment loans.