Paying for your holiday on a credit card

When paying for holidays on a credit card, you don’t need to pay the full price to get section 75 protection. Paying the deposit is enough to get you the legal protection.

If you’ve booked a holiday or flights costing between £100 and £30,000 paying either a deposit or the full price on your credit card, you may be able to make a claim if the holiday isn’t as described or the airline or holiday company goes bust.

Similarly, it doesn’t matter whether you use your card to buy something in the UK or overseas, you’re covered in the same way.

Not all situations are covered.

What is covered:

• the cost of your holiday if the holiday company goes bust
• the cost of your flights if the airline goes bust
• additional expenses or consequential loss — for example, if you had to buy more expensive flights to get home after an airline went bust.

What’s not covered:

• in some cases, if you buy a ‘flight only’ from a third party, such as a travel agent, you might not be able to make a claim because the third party was only contracted to provide the tickets and not the flight;
• any costs that you didn’t have to incur – for example, if you decided to extend your stay after the airline went bust (longer than you needed to) you’d be unlikely to be able to claim for extra costs.

Making a section 75 claim on your credit card

If there’s a problem with something you paid for on your credit card, first contact the company you bought it from, and give them the opportunity to put things right.

If they don’t reply, won’t give you a refund, or it’s clear there’s no point contacting them (as they have disappeared or gone into liquidation), you can make a claim against your credit card company.

Here’s how:

• Write to the credit card company, advising what you bought, where and when and how much you paid. Include copies of receipts if you have them (or some other proof of purchase).
• Tell them that you’ve tried to contact the company you bought the goods or services from and what the response has been – if any.
• Explain what you’d like the credit card company to do, usually to refund the purchase price into your credit card account – be sure to state: “I am making a claim under Section 75 of the Consumer Credit Act”.
• Keep a record of the letter, receipts or email you’ve sent.

Download a template letter from the Money Saving Expert website

Alternatively, you can fill in some details on the Which? website and it’ll email you a template letter to send to your credit card provider.

If you’ve a smartphone app for online banking or your credit card provider, you might be able to make your claim online.

Debit card payment protection and chargeback

Debit card payments and purchases aren’t covered by section 75 of the Consumer Credit Act. But you might be able to make a claim for a refund under a voluntary scheme called ‘chargeback’.

How chargeback works

It’s an agreement Visa, Mastercard and American Express have signed up to. It isn’t legal protection like section 75.

That enables you to claim a refund from your card provider if a purchase doesn’t arrive or is faulty.

If you make a chargeback claim, the card company tries to claim your money back from the company you’ve paid, by reversing the transaction.

Normally, there’s no minimum spend to be covered by chargeback, but time limits apply for making a claim depending on the type of card maybe 120 days from making the purchase. If the purchase is for something in the future, such as, tickets to an event, then the time limit starts from the day the event would have happened.

Chargeback claims can take some time to process because the card company has to get the money refunded before it can pass it onto you.

How to complain

If you aren’t satisfied with the response you get from your card company then you can make a complaint to the Financial Ombudsman Service.