Credit Card Debt Consolidation Loans

One of the most common questions surrounding credit card purchases is: "Are my credit card purchases protected?"

This is a good question. Whenever you purchase something using cash, you have certain rights which the company/organisation you bought your item(s) from must respect. If, however, you use your credit card to make a purchase, the good news is - the level of protection you receive can actually be much higher.

Of course, you may already know that purchases made on your credit card are protected... but do you know exactly how they are protected?

Any purchases made using a credit card are protected by the Consumer Credit Act 1974.

Section 75 of this act states that if you've got a claim against a supplier (for breach of contract, for example, or misrepresentation), liability is also passed onto the credit card company. In simple terms, this means you may be able to claim from the supplier or from the company who provided you with your credit card.

It is important to note, however, that this Act doesn't apply to all purchases. It is only purchases which cost over £100 and under £30,000 - and this can still be valid if you've only paid a deposit using your card.

Government website consumerdirect.gov.uk sheds some light on this Act to help explain it more. For example, if you bought two items priced at £60 each and paid for them - on your credit card - together (totalling £120)... you'd be covered. However, if you bought these items separately, you would not be covered, because the individual purchase amounts were less than £100.

The cover provided by the Consumer Credit Act 1974 can be particularly useful if, for instance, you bought the items on holiday in another country, or the company you purchased the items from has gone out of business.

Please bear in mind that section 75 of the Consumer Credit Act 1974 only applies where the credit was provided under a 'pre-existing arrangement' which involved both credit provider and trader. This means that credit cards are covered, but credit card cheques are not covered as it is possible to make these payable to anyone. Purchases won't be covered if they were made using debit cards or charge cards.

Information taken from consumerdirect.gov.uk and financial-ombudsman.org.uk.