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Section 75 – How using a credit card gives you extra consumer protection

a credit card and padlock looks at how card users have Section 75 to fall back on when purchases go wrong

Credit card spending has had a bad rap of late, as politicians, economists and social commentators bemoan the mountain of debt that Britons have built up. But here’s one real benefit to paying for your goods by credit card instead of by cash, cheque or debit card.

Section 75 – extra protection for credit card spenders

Whether it’s a new outfit, the week’s groceries, a holiday or a railcard, if you use your credit card to pay for it, you get extra protection under Section 75 of the Consumer Credit Act 1974. Under this Act, both the credit card provider (the lender) and the group you’re buying something from (the supplier) are responsible for the purchase, giving you extra protection if things go wrong.

What does the Act cover?

Almost everything - from electronic equipment to paying for a burst water pipe to be fixed. However, there are two limitations:

1. Only goods or services costing between £100 and £30,000 are covered by the act

2. Only purchases made using a credit card are covered

The protection does not include items bought using a debit card, charge card or even a credit card cheque. Nor are cash purchases covered, even if the credit card was used to withdraw the money or load up an internet account.

How does it work?

Let’s say you bought a television that was faulty. You tried to take the matter up with the supplier, but since you’d made the purchase, the firm had gone bust. If you’d paid by debit card there would be very little you could do except put it down to experience.

But, if you’d used your credit card for the transaction, you could take the matter up with the card provider and get your money back.

The protection also kicks in if the firm supplying the goods goes out of business before they’re even delivered. Under these circumstances, you – the consumer - can still claim a refund from your credit card provider.

Holidays and flights

The extent of the cover is a bit more complex when it comes to holidays and flights. If you used your credit card to buy a plane ticket from a travel agent, you’re unlikely to be able to get any money back if the airline delays or cancels the flight. This is due to a quirk under which the travel agent was supplying the ticket and not the flight. For more information on problems at the airport, read our article Airport Chaos.

But if you used your credit card to pay for a travel agent’s own ‘package’ of travel arrangements, such as a package holiday, the travel agent would be classed as the supplier, and so they, or the credit card provider, would be responsible if there were problems.

Anything else?

It’s worth noting that section 75 doesn’t absolve the supplier of their responsibilities, and if things do go wrong, they should still be your first port of call. But it does offer an extra layer of protection if the supplier isn’t co-operating or is no longer in business.

However, you can’t claim twice!

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Cara Credit Card staff writer


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