Part 2 of our guide looks at how section 75 can protect you when you pay for home improvements on your credit card and explains what you need to consider when planning to use finance to pay for work on your home.
If you missed part 1, you can find it here.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender
Section 75 gives you extra protection when you pay for goods or services with your credit card so that if something goes wrong, you shouldn’t end up out of pocket. This protection means that, as long as the cost of the item was between £100 and £30,000, your credit card provider is liable for the cost of your purchases if they’re delivered faulty, broken or if they never turn up at all. So, if the company you bought your new sofa from goes bust and fails to deliver or provide a refund, you can claim your money back through your credit card provider.
For example, if you pay £150 towards a £9,000 conservatory on your credit card, you’ll be covered for the full amount, regardless of how you paid the remaining £8,850. If the conservatory roof leaks, you can claim the money back either from the company you bought it from or your credit card issuer. However, remember that you can only make a claim for each item that cost more than £100 – if you bought several products (such as a trolley-full of tins of paint) and the combined cost is £100, you won’t be covered if there’s something wrong with them.
“never spend more than you can comfortably afford to repay...”
One thing worth looking out for when spending on a credit card is that you may be tempted to spend more than you can afford to pay back in order to get your home looking the way you want it to. To avoid this, make a list of what you’re going to buy before you hit the DIY and home interiors store. Never spend more than you can comfortably afford to repay – even if that means holding off doing the work until you’ve saved up a bit more towards the project.
So, if you want to redecorate each room in your house, don’t immediately go out and buy every tin of emulsion and gloss you’re going to need if you’re not going to get round to decorating half of the rooms for a few months. If you do, although you might feel organised, you’ll be paying interest on what you spend for longer (unless you pay it off in full each month). It would probably make more sense financially to buy what you need for the first room or two, and then once they’re done move on to the next purchases.
“shop around and never go for the first deal you see...”
You may find that certain things are cheaper at certain times of year. For instance, it may be cheaper to buy new kitchen units in the January sales, or garden furniture during the winter. Shop around and never go with the first deal you see or quote you receive as this leaves you with no room to negotiate.
39.9% APR Representative (variable)
Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender