Jul 09

Using your credit card

when to use your charity’s credit card

Ahh, the company credit card. If we were city bankers this would be about expensive champagne and over-priced food on very small, square plates. Probably made of slate or something.

Credit cards are normally associated with impulse purchases or booking flights and such in our everyday lives. But there is another side to credit cards that has a more practical aspect.

It comes from a piece of legislation called Section 75 of the Consumer Credit Act 1974. Catchy, no?

It means that if you pay for a product, or a service, for an amount between £100 and £30 000 the credit card company shares the risk, officially called “equal liability”. So if the product is faulty, the service provided inadequate, or the company you bought from goes under before delivery – the credit card company has your back.

Now, you may not have a £30 000 limit on your card, but I’ll show you how to deal with that little problem shortly.

There are some technicalities, of course.  It needs to be for a single item or service, before any additions are made, such as delivery, installation etc. It doesn’t cover agents, such as booking agents or PayPal, as they are not responsible for the service they offer, just the placing of the order. The flip side is that you don’t have to make the whole payment on your credit card! If you only pay the deposit on an item, say £42, then pay the rest by any other means, the “equal liability” still applies! So even if your purchase exceeds your credit card limit, if you can pay a deposit with your credit card, and the total bill is still between £100 and £30 000 you are still be covered!.

Be careful though – you can’t just change your mind about your purchase, the supplier needs to be at fault with your initial order. And there is still a bit of wrangling going on about “authorised users” as opposed to “principal users”, the actual individual’s name on the card, being the owners of the “contract” involved, but generally you should be safe.  You can read more about it here.

So what to do?

First, contact the provider, on the phone for speed and in writing/email so you have a record, and ask for a refund.

No joy? Ring the credit card company and ask for a refund under the Section 75 of the Consumer Credit Act 1974. Give them every detail you have to hand – who you were dealing with, how you contacted them, receipts and correspondence. Prepare to be fobbed off. They are a business, and the people you will be talking to are the trained to send you looking the other way. Don’t take it – just ask them to get on with it as they are obliged to do. Tell them you expect a return within 30 days.

Remember – this only applies to credit cards. Not debit cards, not cheques, not nuffin’ else.

Practical points:

  • Know your credit card limit
  • Make sure you can pay the full amount each month, set up a direct debit if you can.
  • Keep your records!

Keep an eye out for any other benefits your credit card offers, such as discounts. You can normally find them on the company’s website.

And as always, let us know how you do!


Image courtesy of Freedigitalphotos.net