Credit Card Purchase Protection

Spending on your credit card can give you extra protection if something goes wrong. Read our guide to what purchase protection can cover and what to watch out for.

Spending on your credit card can give you extra protection if something goes wrong. Read our guide to what purchase protection can cover and what to watch out for.

Anelda Knoesen
From the Money team
minute read
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Posted 17 SEPTEMBER 2020

What is credit card purchase protection?

Credit card protection helps you to claim your money back if you use your credit card to buy something and there is a problem with it.

It allows you to get a full refund from your credit issuer on single purchases that cost between £100 and £30,000 and comes with any type of credit card.

Credit card protection and coronavirus

While the coronavirus pandemic has unfortunately affected many services, including credit cards, the legislation under Section 75 of the Consumer Credit Act remains the same. If you have made a purchase that is more than £100, but less than £30,000, for a single item or service, then be reassured that you’ll receive the same credit card protection as you would have previously. 
Find more information on credit cards and coronavirus here.

What does section 75 of the Consumer Credit Act cover?

Under section 75 of the Consumer Credit Act, your credit card provider has equal responsibility with a seller if something goes wrong after you’ve paid for something. Your card provider may refund you if:

  • Your item isn’t delivered to you but you’ve still been charged
  • The item you bought is faulty or damaged and the company won’t refund you or offer a replacement
  • Your item arrives and it isn’t what was described
  • The company goes into administration before you’ve got the item you’ve paid for
  • You paid a £100+ deposit using your credit card on a single item, for example a sofa or holiday, you would still receive purchase protection on the full item, not just the deposit.
  • You’ve bought flights or a holiday with an airline/tour operator that later goes into administration and is unable to refund your tickets
  • Consequential losses, such as transport and accommodation for an event which is then cancelled
  • The purchase is more than £100, but less than £30,000 

Will oversees purchases be protected?

Yes, you’ll be pleased to hear that Section 75 of the Consumer Credit Act applies whether the purchase is made in the UK, abroad or online. You’ll receive the same type of protection, as long as the purchase meets the criteria.

Will group bookings for tickets or holidays be protected?

This is where things can enter a grey area, however, you should receive the same level of protection. 
If you’ve booked a holiday, or tickets to an event on behalf of a group, then technically you should be covered, so long as each individual ticket exceeds £100 and you meet all other criteria. However, some may argue that flights, reservations or tickets under other names aren’t covered by your credit card protection, even if they are then paying you back separately for their ticket. Those individuals may then not receive their portion of the total back. 
If you’re concerned or in any doubt, save yourself the hassle and just ask your group to book individually.

Why do credit card companies offer this protection?

Thankfully, credit card purchase protection is a legal requirement of credit card companies, under Section 75 of the Consumer Credit Act. This legislation shares the financial liability between the seller or service provider and the credit card provider, if the item is damaged, not delivered, the service is cancelled, or the company goes bust. As long as your situation meets all of the criteria, you should be eligible for a refund.

What is credit card deposit protection?

Credit card deposit protection is for products or services you have placed a deposit for, and the company fails to fulfil their promise. This may be that the promised goods don’t arrive, or the service/event is cancelled. 
Common examples include deposits paid towards a holiday, when the airline or tour operator later enters administration. Your deposit is lost, but you may be protected by your credit card provider. Another would be if you pre-ordered a specific product with a deposit, but then the product either failed to release, or the company went bust.

How do you claim money back on credit cards?

To claim back money on your credit card you will have to first contact the company that you bought from. If they don’t get back to you, or offer a refund, you can make a claim against your credit card company.

When you write to your credit card provider, you’ll need to state that you’re making a claim under Section 75 of the Consumer Credit Act, including copies of receipts as proof of purchase. You’ll also need to include any emails or letters you’ve sent to the company you purchased from.

When are you not covered by credit card protection?

There are some cases where you might not be covered by credit card protection. For example:

  • Your purchase is £100 or less, or over £30,000
  • You used a third-party provider, such as PayPal to pay instead of buying directly
  • What you purchased wasn’t a single item done by a single transaction. For example, if you bought three tickets for £90 – paying £270 in total, they won’t be covered. This is because the single item is under £100.

Can you have additional purchase protection on a credit card?

Potentially, as some credit card providers offer premium accounts or services which may protect you for larger amounts. These services vary between providers, as it is not required by law. 
Other legislation, which protects credit purchases over £30,000, comes in the form of Section 75a of the Consumer Credit Act. In 2010, a higher limit of £60,260 was introduced, however, the regulations are stricter. This form of protection doesn’t include credit cards, but instead covers other credit agreements. For example, an expensive car (costing more than £30,000) could be purchased as part of a finance agreement through the official car dealer. To receive this protection, you must have also previously attempted to resolve the issue with the product or service provider directly, but have been unsuccessful.

What debit card payment protection is there?

Debit cards don’t offer payment protection under Section 75 of the Consumer Credit Act, but are covered by something called chargeback. Chargeback covers you if an item you’ve bought is damaged, faulty or doesn’t arrive.

You’ll typically have 120 days from the date of the transaction to contact your bank to make a claim. You’ll also be expected to provide evidence that the item is damaged, faulty or didn’t arrive, along with proof you bought it.

Unlike Section 75, chargeback isn’t legally binding and your bank doesn’t share joint liability with the seller. When you make a claim, your bank will put in a request to the seller’s bank to claim the money back. The company can always dispute your claim, so there’s no guarantee that your bank can get your money back.

Can I compare credit cards with protection?

As credit card protection is a legal requirement under Section 75 of the Consumer Credit Act, you won’t need to compare credit cards based on their protection benefits. All credit card providers are required to meet these standards. 
However, if you’re looking for additional protection, you may be able to find this with certain premium credit card services. This is worth comparing, if you believe you’re likely to exceed the £30,000 limit for credit card protection.

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