When it’s best to pay by credit card
Many consumers are still not aware of the extra protection offered on their purchases, under Section 75 of the Consumer Credit Act 1974, when using their credit cards.
What is Section 75 of the Consumer Credit Act 1974?
Section 75 of the Consumer Credit Act is a piece of legislation that protects the consumer who has paid for goods or services by credit card. Customers who have a claim against a supplier for breach of contract or misrepresentation will generally have an equal claim against the card issuer. A breach of contract can include - failure to supply goods or services, faulty goods or services or the supplier has gone out of business.
What protection does Section 75 give me?
You are protected for goods or services, purchased with a credit card, which are over £100 but below £30,000 in value. Purchases are not legally protected if made by debit card or charge card (where the monthly bill has to be settled in full). Also, purchases made with credit card cheques are not covered . To receive protection under Section 75 the customer must have a valid claim for breach of contract or misrepresentation against the supplier.
What happens if I have only paid a deposit with my credit card?
Regardless of how much of the full price you have paid by credit card, your credit card provider will be jointly responsible with the supplier for the full amount. So, for example if you paid a deposit of £50 with your credit card and the balance of £450 by cheque your credit card provider will be jointly responsible for the full amount of £500.
How do I make a claim under Section 75?
If you have purchased goods or services by credit card and have not received them or they are faulty you have got the option to claim through your credit card provider immediately. However it may be wise to first contact the supplier who may replace the goods or services, or make a full refund without any problem.
If you don't get the required response from the supplier then you should:
- Contact your credit card company requesting to make a complaint under Section 75 of the Consumer Credit Act
- Provide full details of the purchase and when it was made
- Provide full details of your complaint
- Explain what actions you have taken with regards to the supplier and what has been the response
Your credit card provider should be able to give you an idea how long their investigations will take and will often suspend the item on your account pending the outcome.
Are overseas purchases covered under Section 75?
Yes, all overseas purchases are fully covered.
Are there any issues of which I need to be aware?
If you purchase goods or services through a 'third party' then you cannot make a claim against them. This is most common when purchasing through a travel agent - if you are paying for a flight then your claim will be against the airline, whereas if you are paying for a travel agents package holiday your claim will be against the travel agent. In both instances you can still use Section 75 providing you have a valid claim for breach of contract or misrepresentation.
To sum up...
If you are buying anything with a value of between £100 and £30,000 then use your credit card for the added consumer protection, even if you have the money in the bank. Then simply pay off your credit card before the end of the month to ensure you are not charged any interest.
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