|
By Amy Rich
Staff Writer, 13 March 2008
Related Guides & News
Credit Card Security: Just How Much do they Offer?
Credit card companies are constantly implementing new ways to cut down on credit card fraud and increase the security you have over your details and money.
Shopping online with your credit card
Check out our guide to shopping online with your credit card and how they can keep your money and your purchases safe.
House of Lords rules on credit card protection (5. 11. 2007)
The House of Lords has recently upheld a decision made by the Appeal Court earlier this year in relation to credit card protection on purchases and services made abroad by credit card users.
FOS to dispel myths over credit card protection (28. 6. 2007)
The Financial Ombudsman Service has announced that it will be issuing guidelines to make Section 75 of the Consumer Credit Act 1974 clearer in relation to the protection that consumers can receive through making credit card purchases.
|
MANY credit cards offer what sounds like added incentives - purchase protection insurance or purchase delivery protection for example, but are they selling you something you already have?
All purchases over £100 and under £30,000 made on credit cards are covered by Section 75 of the Consumer Credit Act 1974. If you pay for an item on your credit card and a problem arises (e.g. breach of contract, false information, faulty goods or non-delivery) with this purchase, the credit card company is held equally liable by law as the supplier.
What this 'equal liability' means is that by law you can claim back the cost of goods or services that have not been supplied as said or are faulty from the company or the credit card you paid for the items with.
In fact, by law you can go straight to the credit card company first - as the liability is equal neither the supplier nor the credit card company are held any more responsible than the other.
On the face of things the level of cover that Section 75 provides seems pretty hard to beat, so do these 'extras' from the credit card companies give you anything more?
Barclaycard offers purchase delivery protection on its cards, something you may well of seen previously advertised on the TV. But is this really an added bonus, and in what way is it any different from Section 75?
Here's the breakdown:
Barclaycard purchase delivery protection covers you for:
- Online, high street and telephone shopping if the goods are delivered directly to your front door
- New goods only
It does not cover:
- Second hand or antique goods
- Purchases made from websites or suppliers outside the UK
- Travellers cheques, cash payments, cheque payments, money orders, contracts for the provision of services, software or data downloads
In all instances, Barclaycard's purchase delivery protection refunds will not exceed your credit limit or amount charged to your Barclaycard - and will never exceed more than £5000.
Section 75 covers:
- Faulty/damaged, mis-sold or non-delivered goods costing £100 - £30,000 bought anywhere in the world (thanks to a new ruling by the House of Lords)
As they say, "you do the math!" Barclaycard's purchase delivery protection offers a whole lot less than you'll already get under Section 75.
Purchase protection insurance is, however, a lot better - and does offer you cover that Section 75 does not.
Purchase protection insurance generally covers:
- Loss, theft and accidental damage of new purchases.
- Usually lasts for a specified period - often around 90 days.
- Can sometimes cover worldwide purchases, but many policies are restricted to UK purchases.
Many credit cards, especially platinum cards, offer purchase protection insurance at no extra cost. One issuer to offer worldwide purchase protection insurance is Citi, whose policy available on all Citi issued credit cards offers cover for most new, personal items bought anywhere in the world against theft, accident damage and fire cover for up to 30 days from the day they were purchased.
Other issuers including American Express, the Post Office and Virgin Money offer free purchase protection insurance policies on their credit cards.
There are of course limitations of cover and exclusions, as you would expect from any insurance policy. Limitations tend to be on item cost with minimum and maximum claim amounts, as well as maximum annual claim amounts. Exclusions can include the types of items covered; for example, it's common that second-hand goods are excluded.
Does it all add up?
So, whilst the offer of purchase delivery protection may sound like a good thing - it offers no further benefits than what you are already covered by under Section 75.
However, Section 75 does not cover purchases against accidental damage, loss or theft so cards that offer free purchase protection insurance are giving you something extra.
With such 'roll off the tongue' names, it's quite easy to forget which deal is actually a deal. But just try and remember:
- Purchase protection insurance: Good
- Purchase delivery protection: You're already covered!
Credit card companies bandy 'offers', 'incentives' and 'extras' about like a carrot in front of a donkey. And many times they're just not worth writing home about.
To recap - Section 75 covers you for credit card purchases made worldwide costing between £100 - £30,000.
So, if the worst happens and your goods aren't as described, the item is faulty, the supplier goes out of business or fails to honour the contract then look to Section 75.
If you want extra piece of mind then plump for a credit card with purchase protection insurance because even if the goods you have bought are fine, if they're lost, damaged accidentally or stolen within the credit card company's set period of time then, phew, you're covered!
 Credit card guide
Credit card features archive
|
