It often makes sense to buy goods with your credit card rather than use another form of payment, as they offer you valuable rights to protect your purchase.
Let's face it. Credit cards are a jolly convenient way of handling cash flow and there's the added bonus that you can get up to 59 days of borrowing interest-free. But there are other benefits too.
Increased rights under the Consumer Credit Act
Buy anything for between £100 and £30,000 on a credit card and you have valuable rights under Section 75 of the Consumer Credit Act. It means that when you buy something using your credit card, your contract is with both the trader and the card issuer. They have equal liability for anything that goes wrong so you can take action against either of them to get compensation. The legislation is restricted to goods sold for more than £100 and less than £30,000 but it's tremendously useful in situations where, for example, the goods are damaged or don't turn up, or the company goes bust.
Section 75 covers everyone using a credit card but you won't be surprised to know that card issuers don't exactly fall over themselves to let you know about this extra protection. In fact, you might even have to fight quite hard to enforce your rights with some companies but stick to your guns if you know you're in the right.
Interestingly, the legislation applies even if you only make a part-purchase, for example, by using your credit card to pay a deposit on something and you are also covered for items bought abroad and over the Internet. Note that debit and charge cards are not covered by the legislation so, when you buy something for more than £100, make sure you use your credit card to do it. The extra protection makes it worthwhile as long as you pay your card off in full at the end of the month.
Free purchase protection
Some credit cards also offer purchase protection for free. If items bought with your card are lost, damaged or stolen within a specified period (usually up to 100 days from the purchase date), you can make a claim against this cover. It's useful for fragile or high-value goods but check the small print for exclusions
Other benefits
Other free benefits sometimes offered by card companies include price protection where if you buy an item and then find it cheaper in a later sale, they'll allow you to claim back the difference. The usual time limit is 60 days from the purchase date. Claims between £10 and £1,000 are usually valid, often subject to a small excess. You may also get free extended warranties, which extend manufacturer guarantees, usually for an extra year, or, alternatively, certain types of free travel insurance.
Back to main credit cards page »
