A guide to using credit cards

( 10 May 2018 )

Tips to help you understand your consumer rights when you use a credit card.

From time to time we all spend more than we should and sometimes what we buy does not arrive, goes wrong, or is an out and out fraud. That is why it is safer to use credit cards.

Items which cost more than £100 are protected by what is called ‘section 75’ rights, which means the credit card provider must refund you in full if the retailer refuses to do so or goes bust.

Of course, these refunds only apply to goods that were faulty or fraudulent – not to things you just did not like.

Fewer people know there is a separate right called ‘chargeback’ to get your money back, even if the item costs £100 or less, or you pay by debit card or prepaid card. 

Here are a few key things you need to know when you use a credit card:

Avoid these six common credit card mistakes.

What are your rights to return a purchased item?

If you order something online or over the phone, you have an absolute right to return the item, as long as you do so within 14 days of receiving the item. 

You do not need a reason. You must return the goods and normally pay the postage. 

Get a receipt of posting from the Post Office. The supplier has to refund your money within 14 days, but you may not get back the delivery costs. 

The retailer can make a deduction if the goods are not as new. This right only applies to ‘distance sales’ – telephone or online purchases – not to shop purchases.

Read more about Section 75 protection.

What is 'chargeback'?

Chargeback is not a legal right, but it is part of the contract between the card provider and Visa or MasterCard. 

It also applies to American Express credit cards – but not its charge cards. 

It applies in the same circumstances as section 75 – the goods are faulty, do not arrive, or the firm goes bust and you cannot get your money back from the supplier.

For section 75 or chargeback you apply to your card provider. You may have to be insistent, especially about chargeback, as these rights are sometimes misunderstood. 

If your problem is not resolved within eight weeks you can complain to the Financial Ombudsman Service who will decide what is fair.

What if the item you buy is faulty?

If something you buy is faulty, or not as it was described to you, then you can return it and get a full refund. 

This applies to items bought face to face in a shop or online or on the telephone. 

It applies even if the item was bought in a sale. If an item goes wrong within six months then you should always get your money back, although the retailer may also offer to repair it free.

After six months you may have to prove that you did not cause the problem. 

You will need proof of purchase. But if you don't have the receipt, then a credit card or bank statement should be enough.

Visit our consumer rights section for more information on your rights and avoiding scams. 

What if you change your mind about a purchased item?

If you buy something that you decide you do not like, many retailers will take it back as long as you return it quickly and undamaged – and unworn in the case of clothes. 

You may get a credit note rather than a refund. These returns are entirely at the discretion of the retailer. 

Happy spending!

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.