Credit card protection

What is credit card protection?

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Credit card protection can help you recover your money when purchases go wrong – here’s how.

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Credit card protection and coronavirus

If you’re worried about how coronavirus will affect your credit card bill repayments, we advise you to contact your lender and make them aware of your situation. These are unprecedented times and are constantly evolving, so keep up-to-date by checking the government page for those affected by COVID-19.

Keep in mind that the financial conduct authority (FCA) has called on lenders to support their customers and take their individual circumstances into account.

What is credit card protection?

If you buy something with your credit card and the item is faulty or damaged or it never arrives, your credit card provider should be able to help you get your money back.

The most popular type of credit card for people earning 10k or more is balance transfer

Data collected by MoneySuperMarket between February 2018 and February 2019, accurate as of April 2019

What does credit card protection 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 it isn’t the same as the description
  • Your item isn’t delivered but you’ve still been charged
  • The retailer or trader goes out of business before you’ve got your item.

A purchase might be a computer, an item of furniture, a flight or a holiday that you’ve paid for using your credit card.

Why do credit cards offer this protection?

In 1974, the government reformed the law concerning consumer credit. Under Section 75 of the Consumer Credit Act, credit cards must provide protection for purchases above £100 and below £30,000. 

Debit cards don’t offer this protection, which is one reason why it can be a good idea to pay for items with your credit card instead.

However, it’s important to remember that if you do make a purchase on a credit card, you’ll need to be able to pay back what you owe as soon as possible to avoid being hit with interest.

The most popular type of credit card for people aged 18-25 is credit builder

Data collected by MoneySuperMarket between February 2018 and February 2019, accurate as of April 2019

Credit card deposit protection

If you only use your credit card to pay a deposit towards the cost of an item or a holiday and you pay the rest with another payment method, your credit card provider could still cover the whole amount of the purchase.

The item you’re buying will still need to cost more than £100 and less than £30,000, but you don’t need to put the whole amount on the credit card to get access to protection.

What is added purchase protection on a credit card?

Some premium credit cards also offer additional purchase protection on top of the standard Section 75 cover, and can protect your item if it’s stolen or accidentally damaged.

The most popular type of credit card for unemployed people is credit builder

Data collected by MoneySuperMarket between February 2018 and February 2019, accurate as of April 2019

When should you contact your credit card provider for a refund?

If you try to get a refund from the retailer or trader but you aren’t successful, it’s a good idea to then contact your credit card provider. You’ll need to send them copies of purchase receipts if you have them, and let them know what the situation is with the retailer.

When credit card protection won’t cover your purchase

It’s important to bear in mind that credit card protection won’t cover the cost of your purchase when:

  • The item costs less than £100 or more than £30,000
  • The item is technically two transactions – for example, two single train tickets costing £60 each, so £120 in total
  • You use a store card
  • You use a third party payment provider to pay or to book

Third party payment providers like PayPal will offer their own payment protection scheme, and third party holiday providers should come with specific holiday protection.

The average annual income for credit builder credit card applicants is £10-20k

Data collected by MoneySuperMarket between February 2018 and February 2019, accurate as of April 2019

Chargeback for debit and credit card purchases

Some debit and credit card providers offer Chargeback protection for faulty, damaged and mis-sold items or purchases that never arrive. If you make a claim via Chargeback, the payment you made will be reversed and the money will go back on your card.

Providers that offer Chargeback protection don’t tend to set a limit for the minimum or maximum amount you need to spend to be able to claim – although MasterCard has a minimum purchase spending amount of £10. But be aware you only have 120 days to make your claim and the scheme is not legally binding.

Comparing credit cards with protection

All credit cards offer free protection, but some will offer added purchase protection as part of the card deal too. MoneySuperMarket’s credit card Eligibility Checker will ask you a few questions about your personal and financial situation and what you want to use your credit card for to show you the cards you are most likely to be accepted for, without harming your credit score. You can sort the results by “Highest approval likelihood” to compare cards you’re more likely to be approved for.  

You can also click “Full product details” in the card listing and scroll down to “Other 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 credit limits, rewards, fees and more.

Moneysupermarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.

Where to next?

What is a credit card?

6 benefits to getting a credit card

Compare credit cards with MoneySuperMarket’s Eligibility Checker

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