Credit Card Protection: Explained

4 Minutes Read

There are so many benefits to using a credit card, one of which is credit card protection. However many of us don’t fully understand or use these safeguards that free.

Under Section 75 of the Consumer Credit Act, you are protected by your credit card provider for purchases. But what does this mean, and are you safer paying with a credit card than with cash or a debit card?

Piggy Credit Card

Here’s credit card protection explained:

Section 75 of the Consumer Credit Act

In a nutshell, this law means that if you purchase anything such as a laptop or a holiday between £100 – £30,000, your credit card company is as liable as the company from where you’ve bought your product if it is faulty.

These are the situations where you’re covered:

    • If the product is faulty or not up to standard
    • If the company has misrepresented what it is supplying
    • If you do not receive your purchase after ordering it

Fortunately, you do qualify for reimbursement even if you make a part payment for a purchase with your credit card. So if you paid a £30 on your deposit credit card and another £300 on a debit card you would be able to claim for the full £330.

Chargeback

Chargeback also allows you to try to recover purchases under the £100 limit and is available on debit cards and credit cards like Visa, Amex, Maestro, and Mastercard. However this is what’s known as a ‘Scheme Rule’, so it is not legally binding unlike Section 75. For this reason, you are better to claim on Section 75 if you have spent over £100.

When do you not qualify for Section 75?

There are certain requirements to qualify for this act, for example, the individual item you have bought must be over £100, rather than the total bill. For example, if you purchased a return plane for £120 you would be eligible, but if you paid £60 each for one-way tickets then you would not qualify.

Use this page to find out how to claim your credit company.

As always, making payments with credit cards can be very beneficial for your finances such as protecting your money and managing your outgoings to spread the cost of expensive purchases. But it is important to use credit cards responsibly and create a sustainable budget that you can stick to so that you can avoid potential financial difficulties in the future.

If credit cards aren’t for you, there are many other borrowing options available. 

  • Overdraft. An overdraft can be used for short term borrowing or emergencies. It allows you to borrow money through your current account for a charge. 
  • Payday LoanPayday loans are another form of short-term borrowing. They’re quick and convenient ways to get access to cash for emergencies, and are repaid in full on your next payday. Most payday loan lenders can help secure loans for poor credit borrowers
  • Instalment Loans. If you’re unable to repay your loan fulling on your payday, instalment loans are flexible and manageable ways to borrow. Rather than paying your loan in one go, an instalment loan allows you to spread the repayments over weeks or months. 
  • Bank Loan. If you’re looking to borrow a large amount, a bank loan may be better suited. Unlike payday loans, personal loans from banks and building societies tend to be for over £1000 and spread over months rather than years. 

If you’re looking to get an instant loan online, PiggyBank can help! We’re a direct loan lender, offering both payday and instalment loans.