🛡️ The Kitchen Nightmare
You hire a company to install a new designer kitchen for £15,000. You pay the hefty deposit with your Debit Card because you pride yourself on being debt-free.
Two weeks later, the kitchen company files for administration. They haven't delivered a single cabinet, and your money has vanished into the insolvency black hole. You call your bank, but they say: "Sorry, we can't guarantee a refund."
The Twist: If you had paid just 1p (yes, one penny) of that deposit on a Credit Card, the bank would be legally forced to refund you the entire £15,000. This is the superpower of Section 75.
 |
| Debit Card vs. Credit Card. |
Under Section 75 of the Consumer Credit Act 1974, credit card providers are "jointly and severally liable" for your purchases. This means if the seller disappears or breaches the contract, the bank steps into their shoes.
£100 to £30,000
Section 75 applies to single items costing between £100.01 and £30,000. Crucially, you don't have to pay the full amount on the card to trigger full protection.
💡 The "Deposit Hack":
You buy a used car for £5,000.
- Action: You pay a £100 deposit on your Credit Card.
- Balance: You pay the remaining £4,900 with a Debit Card or Cash transfer.
- Result: If the car dealer goes bust or the car is faulty, the Credit Card company is liable for the WHOLE £5,000, not just the £100 deposit.
Debit Card (Chargeback) vs. Credit Card (Section 75)
Why is "Debit" so weak? Because Chargeback is merely a banking process rule, whereas Section 75 is a statutory right enshrined in UK law.
Warning (The "Broken Chain" Risk)
Section 75 requires a "Direct Link" (Privity of Contract) between you, the credit card provider, and the supplier.
If you pay via a Third Party like PayPal, Amazon Marketplace (buying from a third-party seller), or Curve, you usually LOSE Section 75 protection. The law sees your contract as being with the intermediary, not the supplier. For major purchases, always enter your card details directly on the merchant's checkout page.
Chief Editor’s Verdict
You don't need to accrue interest to use Section 75. Use your credit card for the deposit or full payment to secure the legal protection, then pay off the balance immediately via your banking app.
It costs you £0 in interest, but gains you the most robust consumer financial protection in the world.
🇬🇧 London Wealth Insider's Choice
Smart strategies for high earners and investors
👉 Divorcing? Don't Just Split the House. Why 'Pension Sharing' is Your Most Valuable Asset 👉 Maxed Your Pension & ISA? Why Wealthy Brits Buy 'VCTs' for 30% Tax Relief 👉 Contractor in 2026? Beware the 'Inside IR35' Trap. Why You Might Pay Employee Tax Without Rights 👉 Savings Taxed at 40%? Why Smart Investors Buy 'Low-Coupon Gilts' (Tax-Free Gains)Section 75 protection applies to credit card agreements regulated by the Consumer Credit Act. It does not apply to debit cards, charge cards (where the balance must be paid in full each month), or business credit cards. This article is for information purposes only and does not constitute legal or financial advice regulated by the Financial Conduct Authority (FCA).
0 Comments