What Protection on Purchases can Credit Cards Provide?
One of the best extras offered by credit cards is the consumer protection you’ll receive on goods and services. This not only extends to purchases made in the UK but also abroad.
More from Credit Fraud and Protecting Your Credit Cards
7 January 2009
What Protection On Purchases Can Credit Cards Provide?
If anything goes wrong such as the goods are damaged or the company goes into liquidation, you will have protection.”
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Buy with confidence
Imagine buying a holiday or flights to that dream villa, only to hear at the last minute that the travel company has gone bust and you may not get your money back.
This is a very upsetting situation and it does happen, especially when economies experience a downturn.
It is just as bad if you purchase a wedding dress, for instance, that arrives damaged, or a special toy for your child’s birthday. The pleasure of the purchase is ruined if, to add insult to injury, you have to haggle with the supplier over liability. This is stressful if you have made a purchase for a make or break situation and just plain irritating if the goods are for more everyday needs.
Use your credit card for consumer protection
If you use your credit card rather than a different form of payment this will give you extra consumer protection. Under section 75 of the Consumer Credit Act, if you pay for items from £100 up to £30,000 both the card issuer and the trader have responsibility under a rule called equal liability. If anything goes wrong such as the goods are damaged or the company goes into liquidation, you will have protection.
This is why many people book flights or a package holiday on their credit card and then pay it off immediately after they have made the transaction. This consumer protection does not exist if you pay by cash or debit card.
Using a credit card, this protection also applies if you part pay for something.
The same rights are also applicable to goods brought abroad using your credit card rather than another form of payment. This also includes buying goods for delivery to the UK from overseas by telephone, mail order or over the Internet.
Price protection
Check the small print of your credit card to see if it includes price protection. This means that if you make a purchase at one price and it becomes cheaper in a sale or a special discounted period, you may be able to claim back the difference. A time limit usually applies to this of 60 days from your original purchase and generally covers from £10 to £1,000.
Purchase protection
If you use more than one credit card it might be wise to use the one that has purchase protection in the lead up to special occasions such as Christmas, a wedding or a holiday. But do weigh this up with the other benefits of the card. The best combination is a card that offers a good rate of interest or none at all, cash back and purchase protection.
But whatever type of card you use, your rights under the Consumer Credit Act remain. A card that offers purchase protection is an added extra. As always, check the small print to ensure that the cover you seek actually exists in the particular card’s policy.
