British holidaymakers are being advised to rethink how they pay for trips and purchases overseas, as choosing the wrong payment method could leave them without vital financial protections. Experts from consumer champion Which? have emphasised that paying with a credit card, rather than a debit card or cash, can provide a powerful safety net if travel plans go wrong.
The Power of Section 75 Protection
In a recent episode of the Which? podcast, presenter James Rowe explored the robust safeguards available to credit card users. Banking investigator Chiara Cavaglieri and legal expert Gurpreet Chhokar detailed the workings of Section 75 of the Consumer Credit Act 1974.
This law makes credit card providers jointly liable with retailers if there is a breach of contract or misrepresentation. "So section 75 is a purchase protection for credit card payments over a hundred pounds and under 30 grand," explained Chiara Cavaglieri.
Gurpreet Chhokar added that this cover applies in situations where goods are faulty, fake, or not as described. "The credit card provider also has to sort the mess out in that situation," she stated.
Understanding the Limits and Scope
It is crucial for consumers to understand the specific conditions of Section 75. The protection only applies to individual items or single-element services costing between £100 and £30,000. For example, buying two £50 t-shirts or two separate gig tickets under £100 each would not be covered under Section 75, though a chargeback claim might be possible.
Furthermore, Section 75 protection extends beyond standard credit cards to include:
- Store cards
- Store instalment credit
- PayPal Credit
- Payments made via Google Pay or Apple Pay linked to a credit card
The protection does not cover debit card transactions, purchases from third-party sellers on platforms like Amazon Marketplace, or Buy Now Pay Later schemes.
Chargeback: A Vital Secondary Safeguard
While Section 75 offers strong statutory protection, it is not the only tool available. The chargeback scheme allows customers to reclaim funds when services are not delivered and a retailer refuses a refund.
A key advantage of using a credit card is access to both layers of protection. "The whole point is that if you can't, if you're not eligible for section 75 using a credit card, you are for chargebacks. So you do get both," noted Chiara Cavaglieri.
She warned that relying solely on a debit card means depending on the voluntary chargeback scheme, which "just isn't as powerful" as the legal rights provided by Section 75.
For holiday bookings, this dual protection is particularly valuable. If a travel company fails, credit card users have a direct route to claim from their card provider under Section 75 for costs over £100, or via chargeback for other amounts.
Consumers needing to make a claim are advised to contact their card provider first. Further guidance is available from the Financial Ombudsman Service, and the full discussion can be heard on the Which? podcast.
