Credit Card Protection

Credit cards on a laptop with a padlock on top

Does paying by credit card protect you?

Whether you’re making a large, one-off purchase or buying something online, you may have been advised that paying with a credit card could give you extra protection.

And it’s true! Under section 75 of the Consumer Credit Act, all creditors (including credit card companies) are jointly liable for any purchases you make between £100 and £30,000. This means that, if you order something which arrives damaged or doesn’t arrive at all, your credit card provider must assist you in getting your money back.

What is credit card protection? Can I get a refund if I paid by credit card?

Credit card protection can help you to get refunded for purchased goods and services that do not meet the terms of the contract you entered when you paid for them.

Credit card providers are legally required to protect any purchases made between £100 and £30,000 completely free of charge.

What is Section 75?

Introduced in the 1970s, when paying for goods using a credit card was becoming more and more common, Section 75 of the Consumer Credit Act is a consumer protection law in the UK which means that your credit card provider is forced to take equal liability with the retailer of the purchases you make.

Want to benefit from credit card protection but can’t due to bad credit? Find out how to improve your credit score here.

What does credit card protection cover?

Credit card protection could come in handy for you if:

  • You’ve bought an item that does not arrive and the retailer is refusing to issue you a refund
  • You’ve bought an item that, on arrival, does not match its initial description
  • You’ve bought an item that arrives damaged
  • You’ve paid for goods or services from a retailer which has since gone out of business

It does not matter what the item or service that you have paid for is, as long as its value is between £100 and £30,000 and was paid for using a credit card. This can be anything from clothes and shoes to expensive computers and holidays.

Credit card protection under £100

£99 is still a lot of money to lose, but if you’ve spent less than £100, your purchase will not qualify under Section 75 – however, you might be able to get your money refunded via a credit card chargeback.

How does credit card purchase protection work? How do you get your money back from a credit card purchase?

Before claiming a refund from your credit card provider, you should follow the relevant steps to try and get the retailer to issue your refund. Only if you are unsuccessful in doing this should you contact your credit card provider.

To claim a refund from your credit card issuer, follow these simple steps:

#1 - Write to your credit card provider* (some companies allow you to apply for a refund online or over the phone), explaining your situation and copies of any relevant receipts. Inform them that you have tried to contact the retailer but had no success.

#2 – Explain what you would like your credit card company to do regarding your claim – for example, issue a refund paid directly into your credit card account. Make sure to be clear that you are claiming under Section 75 of the Consumer Credit Act.

#3 – Keep a copy of the letter/email that you sent (if applicable) for future reference.

*some credit card companies have disputed transaction claim forms available on their website

Is there a time limit on Section 75 of the Consumer Credit Act?

No, there is no time limit to when you can make a claim under Section 75 – but be warned that, if your claim is false, the retailer has 45 days to dispute it (plus 60 days after that to gather evidence).

What doesn’t credit card protection cover?

The protection when paying by credit card tends to be fairly comprehensive, but there are some scenarios in which you will not be covered.

These include:

  • If your purchase falls below £100, or above £30,000
  • If you make 2 transactions accumulating to over £100 (eg. 2 separately purchased flights costing £90 each)
  • If your payment is made using a third party company (like PayPal)
  • If your purchase is made using a store card

Paying for a holiday with credit card protection – Credit card deposit protection

When booking a holiday, you may decide against paying for it all at once, instead opting to leave a deposit and pay for it over time in smaller instalments.

With credit card protection, you would be covered for the entire cost of your holiday just by using your credit card to pay the deposit – the only exemption is for holidays that do not fall between the £100 - £30,000 price range.

Even if you go on to pay for the rest of your holiday via a different method (debit card, cash etc.), you will still receive full protection under Section 75.

An example of this was when travel group, Thomas Cook, ceased trading in 2019 – some customers were able to claim back the money spent on their future holidays under Section 75 as they had paid their deposits using a credit card.

Deposit protection can be used on any purchase made when you leave an initial deposit, paid for on your credit card.

Debit card protection – Are you protected when paying by debit card?

Section 75 of the Consumer Credit Act does not cover purchases made on a debit card.

You may be able to use ‘chargeback’ to request that your debit card issuer reverses the payment, in the event that your goods do not arrive or they arrive damaged or different to how they were described.

There are no guarantees that you’ll get your money back, though, and your card issuer is not legally required to reimburse you for any lost funds.

Money advice with Bobatoo

Whether you’re looking to switch your current accountsave money on your car insurance or improve your credit rating, Bobatoo’s expansive range of money advice advice is sure to be of use to you. Why not check them out?

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