Credit Card Protection

Credit cards are in many ways superior to their debit card equivalents when it comes to their protective powers. This manifests in a number of different ways:

Legal Rights. If you buy something that costs more than £100 and less than £30,000, and partially or fully pay for it on a credit card, you gain a valuable legal protection known as ‘section 75′. This means the credit card company is equally liable with the retailer if you have a problem with your statutory consumer rights.In other words if you buy something and the company goes bust, or it isn’t fit for purpose then you can go straight to the credit card provider. This is especially powerful if you’re buying overseas, or from a foreign website, as it’s much easier to track down and contact a credit card company than a shop overseas. It’s important to note, this protection only applies to credit and not debit cards.

Internet Spending Protection. The Cahoot credit card has a special scheme to help protect those spending on the web. The Cahoot webcard generates a new number for every transaction, making it very difficult for you to be defrauded. For those who regularly spend on the net, it’s worth adding it to your credit card arsenal.

Payment protection. Some cards choose to offer an additional ‘purchase protection’. This reimburses you if the goods are lost, stolen or accidentally damaged. For example, it covers £50 to £15,000 worth for the first 90 days. If you’re buying something expensive, it’s well worth using this.

Travel Accident Insurance. Many cards also have free travel accident insurance with £50,000 to £250,000 worth of cover for accidents on planes and hire cars booked with them. It’s important to note this isn’t the same as travel insurance; it’s a massively more limited cover. Some platinum and gold cards do include full travel insurance, but ensure you pay for the entire holiday, including the deposit, with the card to qualify.

ID Fraud protection. One or two credit cards have started offering ID Fraud protection as part of their benefits. This means you’ll get access to their help lines if you have a problem. As you don’t need to use the card to be protected, and the help applies even if the ID fraud doesn’t impact the card, it’s worth having.