Credit cards, Section 75 and your consumer rights

Buy something worth more than £100 with a credit card and you could get your money back if it’s broken, doesn’t get delivered or the company goes bust.

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I’ve written a few times about how a credit card can save you money. They can earn you cashback. They can cut nasty overseas spending charges. They can even act as 0% interest loans or help build up your credit rating.

Of course, credit cards won’t be for everyone – and if you can’t afford to pay off the full amount each month they’re almost always worth avoiding.

But there’s one benefit which it’s really worth having a credit card for – and it’s called Section 75.

What is Section 75 and how does it work?

It’s not exactly a sexy name, but it’s a very powerful part of the Consumer Credit Act. This means it’s part of law.

If you buy something that costs more than £100 and less than £30,000 with a credit card, the credit card company is equally liable for your purchases with whoever sold it to you.

So if there’s something wrong with a purchase and you aren’t having any luck with the retailer, you can ask the credit card company to refund you.

And since it’s the law, they have to do it.

It doesn’t cost you anything

As long as the item you buy is over £100 you get the protection, and it won’t cost you anything! Plus all credit cards have to offer this, though it’s a different story for charge cards and some store cards.

You only need to spend £1

If you’re buying something particularly expensive you might find you don’t have the credit limit to buy it outright with your credit card.

Likewise, some retailers or businesses might tell you they won’t accept credit cards or charge you a fee.

Neither means you can’t get the Section 75 protection. As long as the item costs more than £100, you only need to pay for part of it on a credit card to be covered for the total amount. We did this for our wedding reception venue.

It’s single items, not total spend that count

Let’s say you’re out shopping and buy a suit jacket for £60 and suit trousers for £40. That’s £100 on your credit card. But since neither item cost more than £100, this purchase isn’t covered. However, buy a suit for £100 as a single item and you will get the protection.

Secondary cardholders don’t count

I’ve got an Amex cashback credit card. To maximise the money we make Becky has a supplementary card in her name. So when she spends we get more cashback.

But for some weird reason, anything she buys isn’t protected unless there’s proof I’m affected. So if she bought me something it would be covered, but something for herself wouldn’t.

Watch out for PayPal

You only get Section 75 protection if you spend directly on your card. This means PayPal and other middlemen like Groupon can sometimes break that link – meaning you might not get the cover.

It’s the same with travel money cards like Curve. That doesn’t mean you shouldn’t use these services as there are advantages to them, but it something worth considering.

However, Apple Pay and Android Pay don’t break the chain, so you still get Section 75 protection on these purchases over £100.

Chargeback could protect you if you spend less than £100

There’s a scheme called Chargeback that could get you a refund if your purchases were less than £100.

Here you ask the bank to claim the money the back from the trader’s bank on your behalf. It works for both debit and credit cards as long you claim within 120 days.

However, Chargeback isn’t enforced with a law so there’s no guarantee you will get your money back.

Fraudulent payments can be protected too

This isn’t part of Section 75, but there’s an extra protection bonus that comes with credit cards. The maximum you are liable for if your credit card is stolen is £50. And that’s only if money has been spent on it before you report it missing.

Of course, it’s different if you were negligible, say by leaving the PIN on a note with the card. Yes, people do this. I know it can be difficult to remember all your PINs (I completely forgot one the other week), but at least try to not keep any reminders with the card.