everyone
Your credit card comes with built-in insurance that will protect you while making specific purchases. Not everyone is aware of this. When you spend more than £100, the insurance kicks in. The terms and conditions automatically protect you legally. So don’t worry if you receive a damaged item, one that isn’t as advertised, or anything that never arrive. Let’s take a closer look at protecting your credit card.
Reasons For Protecting Your Credit Card
So, why do cards provide such security? Is credit card fraud protection very useful? Basically, card issuers provide it for one reason only. Because the law requires them to do so, namely the Consumer Credit Act. Credit cards must give protection for purchases over £100 but less than £30,000 under Section 75 of this Act. The protection increases from £30,000 to £60,260 under the Consumer Credit Directive.
Importantly, debit cards do not provide similar protection. This is one reason why using your credit card instead of your debit card can be a good option.
Purchase Protection
Some credit cards include extra security features that debit cardholders do not have access to. Many (but not all) credit cards offer purchase protection, which means that if you make a purchase with your card and it is stolen or lost within a certain time frame (typically three months), the credit card will reimburse you.
Always examine your card’s terms and conditions to see if such protection applies to you.
Additional Protections
A few additional cards, though not all, provide free identity theft protection, which protects you from someone taking your identity and racking up credit card debts in your name. This type of coverage usually includes a couple of free credit checks every year, so you can see if anything strange is showing up on your credit record.
Protecting Your Credit Card – Infamous PPI
Another sort of protection that has been making headlines for some time is payment protection insurance, or PPI as it is more often known. This has been sold alongside cards offering to cover your repayments if you are unable to do so, such as if you lose your work, for some time.
Unfortunately, many PPI policies have been mis-sold in the past to people who would not be able to claim and hence were paying for nothing — for example, due to pre-existing medical issues. As a result, it has gotten a lot of bad press, and a lot of claims have been filed since this became public information. The deadline for reclaiming mis-sold PPI has passed.
The Importance Of Protection
However, if you know exactly what you’re getting into and the fees, this type of insurance can be a lifesaver if your income suddenly stops due to illness or redundancy, and you don’t have a partner who can cover your bills while you can’t. Do not think that PPI is always a bad thing; it may be appropriate for certain people. Check the terms, do your homework, and make sure that if you do purchase this insurance, you will be able to make a claim if necessary, and that you will not be wasting your money.
