What protection do I have on my credit card purchases?
If you buy something with your credit card and the item is faulty or damaged or it never arrives, you have the right to claim the costs back through your credit card provider.
Under Section 75 of the Consumer Credit Act, you’re covered by credit card purchase protection if you use your card to buy goods or services such as a computer, an item of furniture, a car, flights or a holiday that costs over £100 and up to £30,000.
Section 75 means that by law the credit card company has equal responsibility (or ‘liability’) with the seller if there’s a problem with the things you’ve bought or the company you’ve bought them from goes bust.
Debit cards don’t offer this protection - although they do offer lesser protection for purchases under £100 through chargeback,.This is why it can be a good idea to pay for large ticket items, such as electricals, furniture and holidays, with your credit card.
However, it’s important to remember that if you use a credit card to make a purchase, you’re borrowing money. And, unless you pay off the balance in full each month you will be charged interest on the debt so you’ll end up paying back more.
What does section 75 cover?
Credit card protection can help to cover the cost of your purchase when:
- You buy an item that’s faulty or damaged and you can’t get a refund or replacement through the retailer or trader
- Your item arrives and doesn’t match the product description
- Your item isn’t delivered but you’ve still been charged
- The retailer or trader goes out of business before you’ve received your item - this includes airlines and holiday companies that go bust
- You pay a £100+ deposit using your credit card on a single item, for example a TV or holiday. You also still receive purchase protection on the full item, not just the deposit
What does section 75 not cover?
It’s important to be aware of the limitations of the law. There are some cases where you might not be covered by credit card protection:
- When purchase is less than £100 or over £30,000
- If you used a third-party provider to pay instead of buying directly. Third-party payment providers like PayPal will usually offer their own payment protection scheme, and third-party holiday providers should come with specific holiday protection
- If your purchase wasn’t a single item – so a number of items within the same transaction. For example, two single train tickets costing £60 each, so £120 in total. This is because the single item is under £100
- If you take out cash from an ATM with your credit card and then use this for the purchase
- If you’re not the main card holder. Purchases made by secondary cardholders are not covered. Neither are goods or services bought on your card but put in someone else’s name – for example, booking a night away as a gift
- Purchases that fall outside of Section 75. Although rare, there are some specific examples where you’re not covered by credit card purchase protection, such as buying a plot of land
How do I make a section 75 claim on my credit card?
If your goods haven’t arrived, or they’re damaged and you want to make a claim for credit card purchase protection, here’s how you go about it:
1. Contact the company you made the purchase from by following the complaints procedure on their website. Often there will be a link to a complaints form.
2. If you’re unhappy with the response or they don’t respond or offer a refund, contact your credit card company to make the claim:
- State that you’re making a claim under Section 75 of the Consumer Credit Act.
- Include copies of receipts as proof of purchase and any emails or letters you’ve sent to the company you purchased from
- Ask for the full amount you paid or the cost of repairing the item if it's faulty
3. You can also ask for money to cover the cost for any damage caused by a faulty item or a service. For example, if you purchased a faulty washing machine and it leaked and ruined the floor, you could claim for both the appliance and floor repairs.
Can I claim money back on flights or a holiday?
There are some cases where you might not be covered by credit card protection:
If you booked a holiday or flights costing between £100 and £30,000 and paid either the deposit or the full price on your credit card, you may be able to make a claim if the airline or holiday company goes into administration or the holiday isn’t as described.
But not all situations are covered. You might not be able to make a claim if you bought from a third-party provider and you also wouldn’t be refunded for any unnecessary costs, for example if you had to extend your stay longer than you expected due to airline or tour operator failure.
How long will it take to receive the money after a claim?
There’s no fixed amount of time for your credit card provider to resolve a Section 75 claim, but if you’re unhappy with how long it’s taking, you can complain.
Providers then have eight weeks to deal with your complaint. If you still don’t hear anything after eight weeks, you can refer your claim to the Financial Ombudsman Service. The Ombudsman service is free and impartial and deals with complaints about regulated financial companies.
What happens if my Section 75 claim is rejected?
If you try to claim through Section 75 and you don't receive your money back, you can ask the Financial Ombudsman Service to look at your case.
The Financial Ombudsman Service is independent and will reach a decision it thinks is fair after looking at all the facts. But this doesn’t guarantee you’ll get your money back.
If you disagree with the Ombudsman’s decision, you might be able to ask an 'alternative dispute resolution' (ADR) scheme to help. Check if the seller is a member of an ADR scheme and if not whether they’re willing to use one.
You could also check on the retailer’s website to see if the retailer belongs to a trade association. If they do, and they’ve broken the rules, you could receive help from the trade body to further your complaint.
Your final option is to take the complaint to the small claims court. It’s not a step to be taken lightly as it may be stressful and time consuming, especially if the Financial Ombudsman Service has already ruled against you.
To go to court, you’ll need to write a formal letter containing your contact details and the nature of the claim, and you should have tried mediation, such as ADR, first. You can make a claim against an org
Am I protected for purchases under £100?
You’re not protected through Section 75 for purchases under £100, but you could use something that is known as chargeback.
Chargeback enables your card provider to reverse a transaction on your credit or debit card. They can then attempt to withdraw funds that were deposited into the retailer’s account and return them to your account. But the retailer may challenge this if they believe your claim is invalid.
Unlike Section 75, chargeback is not enshrined in law, but it forms part of a set of rules of conduct which most of the main banks, building societies and card providers subscribe to.
How else can I protect myself with a credit card?
Fraudsters are always trying to find ways to con us out of our cash, so it’s a good idea to swot up on the different scams they use to avoid being caught out. Popular scams used by criminals include:
Stolen cards. With most credit cards having contactless technology this enables a thief to spend up to £45 per transaction without needing your PIN. If you lose your credit card or it is stolen, call your card issuer as soon as possible so the card can be ‘stopped’ and no more transactions permitted.
Phishing. Another tactic is to contact you by email, phone or post, pretending to be your bank or building society, and ask you to reveal security information, such as your PIN. Your bank will never do this, and neither will the police or any other legitimate organisation, so never give out your PIN to anyone. Try to avoid using family birthdays as your PIN as it can be easy for fraudsters to work out these dates
Skimming. Scammers may use an electronic device to ‘skim’ card details from victims, this could happen when you use your card in shops, restaurants and bars. Your bank will be in touch if they spot any unusual, or potentially fraudulent, transactions and will cancel your card after verifying it with you.
ID Fraud. Criminals may also use your personal details, such as your name, address, date of birth and PIN codes so that they can set up new credit card accounts or take out loans in your name. Take care when disposing of correspondence and documentation and don’t put bank statements or similar items in the rubbish without shredding or destroying them first.
How to protect yourself against scams
- Don’t give out your PIN or write it down. If you do you could be accused of negligence by your bank and if you are defrauded you won’t be able to get your money back
- NEVER share your PIN. If you’re asked for your PIN over the phone, via email or in person, do not share it. A legitimate company will never ask you to provide this information
- Don’t choose an obvious PIN. Try to avoid using family birthdays or door numbers, as fraudsters might work out these dates
- Be cautious around emails asking for personal information. If you receive an email asking you to verify personal or card details, play it safe and delete it. Never click on a link within an email as this may give the scammers access to information stored on your computer
- Take care using public Wi-Fi. Beware of carrying out financial transactions or logging onto your online banking on a laptop, tablet or mobile phone using a public Wi-Fi network as criminals might try to intercept your communications
- Dispose of confidential documents appropriately. Shred documents which contain personal information that could be used by fraudsters
Compare credit cards with MoneySuperMarket
It’s quick and easy to compare credit cards with MoneySuperMarket. We’ll ask a few simple questions and then search providers across the market to find card deals that suit you best.
We can show you the cards you’re most likely to be accepted for, so you’ll know where you stand before you apply. Searching in this way has no impact on your credit file or score.
You can also view full product details and extra features to see if the card offers added purchase protection for free. You’ll also be able to see if the card comes with any rewards, fees or added perks.