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 payment 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.
Why do credit cards offer this protection?
Under section 75 of the Consumer Credit Act, you’re covered if you use your credit card to buy something such as a computer, an item of furniture or a holiday that costs over £100 and up to £30,000.
This means 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, 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’re likely to be charged interest so be sure to pay back what you owe to minimise the amount charged.
What does section 75 of the Consumer Credit Act 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
- You paid a £100+ deposit using your credit card on a single item, for example a TV or holiday, you would still receive purchase protection on the full item, not just the deposit
When are you not covered by credit card protection?
There are some cases where you might not be covered by credit card protection:
- When your 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 done by a single transaction. For example, two single train tickets costing £60 each, so £120 in total - this is because the single item is under £100
How much does credit card protection cost?
Nothing, this type of credit card protection is provided automatically when you get a credit card.
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.
Do credit cards protect holidays and flights?
If you booked a holiday or flights costing between £100 and £30,000 and paid either a 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 – as mentioned above you might not be able to make a claim if you bought from a third-party provider. You also wouldn’t be refunded for any unnecessary costs, for example if you decided to extend your stay longer than you had to after the airline went bust.
How do you claim money back on credit cards?
If you want to contact your credit card provider for a refund, you need to have first made contact with the company that you bought from. If they don’t get back to you, or offer a refund, you can make a claim against your credit card company.
When you write to your credit card provider, you’ll need to state that you’re making a claim under Section 75 of the Consumer Credit Act, including copies of receipts as proof of purchase. You’ll also need to include any emails or letters you’ve sent to the company you purchased from.
Comparing credit cards with protection
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 rewards, fees or more.
Moneysupermarket is a credit broker – this means we’ll show you products offered by lenders. You must be 18 or over and a UK resident. 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.