Credit card protection

One of the biggest advantages a credit card has over cash or a debit card is an enhanced level of protection – both for the items you purchase and your personal details. This is especially beneficial when buying online. You can shop, safe in the knowledge that, in most cases, anything you buy that costs £100 or more is automatically covered against any unexpected occurrences. You're also better protected against identity theft, should anybody manage to steal your details and run up a bill in your name (although it's still advisable to be always be vigilant). Used sensibly, a credit card offers added peace-of-mind when completing any transaction.

Know if you're accepted before you apply with QuickCheck

  • Get credit - up to £1,500
  • QuickCheck won’t affect your credit rating
  • Get a fast response in 60 seconds
Check Now 34.9% APR Representative (variable)
Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender

Credit card protection

Nine times out of ten, you'll buy an item and be completely happy with it. But occasionally something might go wrong along the way. When this occurs, any damage or mistakes will usually be sorted out by the seller. But what if they refuse? What if they go bust or just disappear? What if the item gets lost or is stolen?

It can sometimes be a battle for the unwary shopper, but you can think of a credit card as your little plastic shield. A host of free benefits offer increased protection and make them one of the safest ways of paying.

top

The joy of Section 75

We can mostly attribute the extra protection a credit card affords to Section 75 of the Consumer Credit Act. The upshot of this little clause is that your credit card company is jointly liable if something goes wrong with a product or service you've paid for by credit card. That doesn't apply if you use a debit card.

This means your credit card company shares equal responsibility with the retailer or trader for the goods or service supplied. You can also potentially claim for any breach of contract or misrepresentation by the company from which you've bought your goods.

So if for any reason the merchant isn't playing ball, you can apply for a refund from the credit card company instead.

top

"The item or service you bought must have cost over £100 and not more than £30,000"

top

How much are you covered for?

Ordering currency every time you visit a new country can be time-consuming, and carrying cash around in your pocket is not the safest option – if someone steals it, it's very hard to get it back. However, using your usual debit card or credit card abroad can result in you paying additional charges.

If you regularly find yourself overseas, either for work or – if you're lucky – leisure, it might be worth applying for a credit card that's specifically designed to be used abroad. One of the things that makes these cards cheaper than those not designed for use abroad is that they are less likely to add a fee to the exchange rate, which means you should benefit from a more attractive currency conversion.

Don't sweat the small stuff either

Section 75 unfortunately doesn't cover items that cost less than £100. But you may be able to make a claim on lower priced goods via a scheme called chargeback. It's not a legal requirement, but some financial providers offer it under what's known as Scheme Rules. Offering a basic level of protection is generally regarded to be good banking practice and chargeback can be applied to both credit and debit card purchases.

There can be some variation between how different banks and credit card providers handle chargeback. However, if you want to make a claim on this scheme, you must do so within 120 days of buying the goods or services. Be sure to ask your credit card provider how they operate the scheme and how you can apply for a refund under it.

top
 

"There's a whole army of fraudsters who would love to access that information"

top

ID fraud protection

The internet is a fantastic shopping resource, but people are naturally still uneasy about uploading their financial details on to a website – no matter how secure it seems to be. There's a whole army of fraudsters who would love to access that information. When you combine this with the details of your day-to-day life that you might be obliviously posting on social media sites, you can see how identity theft is such a growing crime.

Credit cards may seem like an easy target. After all, a thief would only need that big number across the front and they could use your account to go on a shopping spree, right?

Happily, credit card providers are very much on the ball when it comes to how and when your credit card is used. Most will monitor your account for suspicious activity and will contact you if there are transactions that don't fit in with your usual spending patterns. However, this is not a failsafe so it's important to check your statements, and report missing credit cards as soon as you realise.

ID fraud protection should come automatically with a credit card, just as long as it can't be proved you were negligent in letting a thief have vital information (especially PIN numbers, which you should never, ever share). However, some credit card providers offer an added layer of protection in the form of a service that alerts you when changes are made to your credit record.

The best protection against ID fraud is to be vigilant at all times. As a general rule of thumb, if something seems too good to be true, double check.

Other protection

All of the protection detailed above is free and automatic when you use your credit card. However, your credit card provider may offer you additional insurance for an extra price. You will need to review the policy benefits and terms and conditions closely to see if they have any value for you.

top

Purchase protection insurance

Not to be confused with PPI (Payment Protection Insurance). As we know, you're already protected under Section 75 when something goes wrong when buying goods or services. However, what if something happens to the item after you've bought it and begun to enjoy it?

It covers goods paid for with your credit card against loss, theft or accidental damage - usually for around three months after purchase. As with any insurance, there are limitations and exclusions, so it's important to check the full policy details before relying on it. These tend to revolve around maximum claim amounts and the nature of the item that's been lost, damaged or stolen. For instance, commonly excluded items include perishables, vehicles (and items left in them), jewellery and electronics.

What can be covered, and the period from the date of purchase that it will be covered for, does vary between credit card providers. So always check the policy before you opt for this extra insurance. Remember, if you have home contents insurance, you're probably already covered.

top

Refund protection and purchase delivery protection

Some credit cards offer two extra forms of insurance. Refund Protection covers items when the merchant refuses to give a refund when they should do and Purchase Delivery Insurance protects you if an item isn't delivered to your door or is lost en route. However, it could be argued that you are already covered for these scenarios under Section 75. Paying an extra premium for this may not be necessary, always read your terms and conditions.

top

"It's up to you whether you want to take out PPI on your credit card and your provider is likely to be very careful how it's offered to you"

top

Payment protection insurance

It's up to you whether you want to take out PPI on your credit card and your provider is likely to be very careful how it's offered to you. However, if you have reason to be worried about your future financial security, having this insurance could be a wise move.

Know if you're accepted before you apply with QuickCheck

  • Get credit - up to £1,500
  • QuickCheck won’t affect your credit rating
  • Get a fast response in 60 seconds
Check Now 34.9% APR Representative (variable)
Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender

Know if you're accepted before you apply with QuickCheck

  • Get credit - up to £1,500
  • QuickCheck won’t affect your credit rating
  • Get a fast response in 60 seconds
Check Now 34.9% APR Representative (variable)
Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender