Credit cards

Your guide to credit cards

Understanding the basics

Using a credit card

Using a credit card in a shop works in the same way as a debit card, but with debit cards, you’re spending the money that’s in your bank account. With credit cards, you’re borrowing money from your credit card provider that you'll need to pay back.

The total amount you owe on a credit card is made up of your spending, combined with any interest and fees – this amount is referred to as the card’s balance.

It’s important to remember to spend sensibly when using a credit card, and be sure to avoid late payment fees by making sure you have enough income to make your payments on time.

What is a chargeback?

If you have a dispute when you have made a purchase with your credit card, you may be able to make a claim using the Chargeback dispute process or Section 75 of the Consumer Credit Act.

Chargeback allows us to provide you with a refund in a number of circumstances, including:

  • If you do not get the goods or services you paid for, including if the company has gone out of business
  •  If goods or services turned out to be faulty, counterfeit, or defective (you may need to return the goods in order to get a refund in this case)
  • If you are charged the wrong amount, or charged twice by mistake
  •  If you are charged for a repeat payment after cancelling a subscription

What credit card payment protection do I get from Section 75 of the Consumer Credit Act?

If you use a credit card to buy goods or services, then the transaction could be covered by Section 75 of the Consumer Credit Act.  This means that your credit card provider and the retailer or supplier may be equally liable for compensating you if something goes wrong. You may be able to make a claim under Section 75 where:

  • the cash price of the goods or services is over £100 but not more than £30,000 (the £100 minimum amount applies to each item or set of items that you buy rather than the total bill- so for example, if you bought two items that together cost more than £100, but each cost less than £100, Section 75 would not apply)
  • all or part of the purchase was made using a credit card (even if it is just the deposit)
  • there has been a breach or misrepresentation of your contract (i.e. where the goods or services were not as described, were faulty or were not received at all) or
  • the retailer or supplier goes into administration before you've received your goods or services 

Unfortunately, Section 75 of the Consumer Credit Act was intended to apply to private individuals, sole traders and partnerships only. Claims made by companies and limited companies are not covered under Section 75 of the Act.

It’s important to note, firstly, that liability under Section 75 arises in certain circumstances., Charge cards are not as classified as credit card, and therefore, is not covered by the terms of Section 75. 

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