Am I protected if I pay by credit card?

Credit Card Protection: Are You Covered for Purchases Over £100?

Paying by credit card offers a reassuring level of protection, particularly for larger purchases. While many assume debit cards offer similar safeguards, the reality is quite different. For transactions between £100 and £30,000, UK consumers benefit from a powerful legal tool: Section 75 of the Consumer Credit Act. This often-overlooked piece of legislation provides crucial recourse if something goes wrong with your purchase.

But what exactly does Section 75 protect you against? Essentially, it creates a legal agreement between you and your credit card provider. If you buy goods or services costing between the specified amounts using your credit card, and those goods or services are faulty, not as described, or not delivered at all, your credit card company becomes jointly liable with the seller. This means you can claim a refund from your credit card provider, even if the seller refuses to cooperate or is no longer in business.

Imagine this scenario: You purchase a new laptop for £1,500 on your credit card. The laptop arrives damaged, and the seller refuses to issue a refund or repair. Under Section 75, you can contact your credit card company and claim your money back. Your credit card provider then has a responsibility to pursue the seller for the refund, removing the burden and stress from you. This significantly reduces the risk associated with larger online or in-person purchases.

It’s important to understand that Section 75 doesn’t cover every potential problem. It specifically applies to goods or services purchased from a UK-based business where the total cost is between £100 and £30,000. It also doesn’t cover issues such as changing your mind about a purchase or simple dissatisfaction with a product’s performance (unless it fails to meet the description or is faulty).

Furthermore, while Section 75 is a powerful tool, it’s not a guaranteed instant refund. There’s a process involved, which may include providing evidence of your purchase and the subsequent problem. Your credit card provider might also investigate the claim before issuing a refund.

In contrast to Section 75, chargeback schemes offered by credit and debit card providers are different. Chargebacks are a process where you ask your card issuer to reverse a transaction, often for fraud or unauthorized use. While helpful, chargebacks are not as robust as Section 75’s legal protection. They rely on the card provider’s discretion and aren’t automatically granted.

In conclusion, Section 75 of the Consumer Credit Act offers substantial protection for consumers making larger purchases using their credit cards. Understanding this legal safeguard empowers you to shop with greater confidence, knowing you have recourse if things go wrong. While it doesn’t replace the need for due diligence and choosing reputable sellers, it offers a vital safety net for significant expenditures. Always keep your purchase receipts and any relevant communication with the seller as this evidence will be vital in any claim.