Martin Lewis of MoneySavingExpert explained how spending as little as 1 cent on a credit card can provide thousands of pounds of protection if something goes wrong with your purchase.
The suggestion relates to section 75 of the Consumer Credit Act, which means that the card provider along with the retailer are jointly responsible for helping customers get their money back on purchases between £100 and £30,000.
However, the customer does not need to have made the entire purchase on their credit card to apply these rights – a fact noted by savings expert Martin Lewis in the latest MoneySavingExpert newsletter.
Martin says that, in theory, even if you paid just 1 cent for the cost of an item – not the full amount – with a credit card, Section 75 can be used for that entire purchase, reports the Mirror.
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He uses the example of someone who wrote in MoneySavingExpert in 2014 and explained how she used this loophole.
The woman bought a fitted kitchen for £22,000 and paid £200 of this amount to her credit card – but was able to get all her money back with Section 75 after the kitchen fitters went bankrupt.
Martin said: “Many people know that paying by credit card is the ultimate weapon of financial self-defense as the Section 75 Act means that card providers are jointly liable for purchases over £100 (i.e. a minimum of £100.01), up to £ 30,000.
“So if something goes wrong, you can ask the card company to sort it out.
“But what few know is that even if you only pay 1 cent of the purchase on the credit card, the card company is still responsible for the ENTIRE amount.”
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However, keep in mind that a card provider will likely challenge any claim on a spend of less than £100, but it’s not impossible to get your money back.
This is because Section 75 of the Consumer Credit Act is technically open to interpretation – although it does mean you can never be sure it will work.
What is Article 75 and when can it be used?
If you made a purchase with a credit card, Section 75 can be used to help you get your money back if something goes wrong.
This could be if the company you bought the goods from goes bankrupt, the item doesn’t show up or arrives broken, or the product was “misrepresented” – so it wasn’t what you were sold.
This is because under the Consumer Credit Act, the credit card provider and the supplier of the goods or services are jointly responsible for any breach of contract or misrepresentation.
Claims made under Section 75 must meet certain criteria and are considered on a case-by-case basis by the card provider.
The purchase must have cost between £100 and £30,000 to use Section 75.
There are a number of other conditions that you must meet before submitting a claim:
The card provider must be based in the UK, although you can complain about purchases from companies abroad.
You are only covered if you buy directly from the supplier, not from a third party.
Debit card payments, checks and transfers are not covered by the Consumer Credit Act. For debit card payments you can try to reclaim your money with ‘chargeback’, but unfortunately this is not legally defined.
If you wish to initiate a claim under Section 75, you must notify your bank and specifically tell them that you wish to make a claim using Section 75.
Your claim must be as detailed as possible, including a description and proof.