Martin Lewis has explained how spending just 1p on a credit card can give you thousands of pounds worth of protection if something goes wrong with your purchase.
Under Section 75 of the Consumer Credit Act, your card provider is jointly responsible – along with the retailer – for helping you get your money back on purchases worth between £100 and £30,000.
But few people realise that you don’t need to have made the whole purchase on your credit card for these rights to be applied, Martin pointed out in the latest MoneySavingExpert newsletter.
In theory, the money-saving guru says even if you paid just 1p toward the cost of an item – not the full amount – using a credit card, Section 75 can be used against that entire purchase.
He uses the example of someone who wrote into MoneySavingExpert back in 2014, explaining how she used this loophole.
Section 75 can be used on credit card spends
The woman bought a fitted kitchen for £22,000 and paid £200 of this amount on her credit card – but she was able to get all her money back using Section 75 after the kitchen fitters went bust.
Martin said: “Many people know that paying on a credit card is the ultimate financial self-defence weapon, as the Section 75 law means card providers are jointly liable for purchases over £100 (ie, a min £100.01), up to £30,000.
“So if things go wrong you can ask the card firm to sort it.
“Yet what few know is even if you just pay for 1p of the purchase on the credit card, the card firm is still responsible for the WHOLE amount.”
However, you should keep in mind that a card provider is likely to fight any claim on a spend under £100, but it isn’t impossible to get your money back.
This is because Section 75 of the Consumer Credit Act is technically open to interpretation – although this does mean you're never guaranteed it'll work.
What is Section 75 and when can it be used?
If you’ve made a purchase using a credit card, Section 75 can be used to help you get your money back if something goes wrong.
This could be if the firm you purchased the goods from goes bust, the item doesn’t turn up or arrives broken, or the product was “misrepresented” – so it wasn’t what you were sold it to be.
This is because, under the Consumer Credit Act, the credit card provider is jointly responsible, along with the supplier of the goods or services, for any breach of contract or misrepresentation.
Claims made under Section 75 have to meet certain criteria and are looked at on a case by case basis by the card provider.
The purchase must have cost between £100 and £30,000 in order for Section 75 to be used.
There are a number of other conditions that must apply before you make a claim:
The card provider must be based in the UK, though you can complain about purchases made to businesses overseas.
You are only covered if you buy direct from the supplier, not a third party.
Debit card payments, cheques and transfers are not covered by the Consumer Credit Act. For debit card payments, you can try using “chargeback” to claim back your money but sadly this isn’t enshrined in law.
To start a Section 75 claim, you’ll need to notify your bank and tell them specifically that you’re looking to make a claim using Section 75.
Your claim should include as much detail as possible, including a description and evidence.
We have a full guide on how Section 75 works, here.