Martin Lewis reveals 1p shopping trick that could stop you from losing cash
MONEY expert Martin Lewis has revealed a 1p shopping trick that will protect you from losing cash.
Speaking on the latest episode of the Martin Lewis podcast, the MoneySavingExpert founder told listeners how 1p on a credit card gets you Section 75 protection.
He said: “If you buy something that costs between £100 and a penny… and you pay for any of it, even just a penny on a credit card, the credit card firm is jointly liable with the retailer for the entire amount.”
This means that if the retailer were to go bust or you don’t receive the item, your credit card company is liable and you don’t have to go back to the seller first.
Therefore, Martin said: “If you can, put at least some of what you’re paying for a big and important item on a credit card.”
It doesn’t matter how much you put on just as long as it is at least 1p and the item or service costs at least £101.01.
Of course, make sure you always pay off the credit card in full to avoid having to pay for any unwanted interest charges.
Martin did say that there are some exemptions to this though – including buying through a travel agent and in some cases, the way that you pay can affect how protected you are.
What is Section 75?
Section 75 of the Consumer Credit Act is one of the most important bits of consumer legislation in the UK.
It means that if you pay for a big purchase on your credit card and something happens – like the goods aren’t delivered or the shop goes bust – your card provider is just as responsible as the retailer to refund you.
There are a few caveats to the legal protection – the purchase you are making must cost between £100 and £30,000.
It’s also important to remember that it only applies to credit cards.
How can I make a Section 75 claim?
To make a claim, contact your credit card provider.
Your first port of call should be its customer services phone number – and tell them you want to make a claim under Section 75.
It should then send you a claim form to fill in, which your provider will later use to process your application.
Your card firm might ask you to provide evidence such as a receipt or a report verifying that the item is faulty.
In cases where the retailer hasn’t gone bust, you should complain to them first.
If they aren’t treating your care with the proper attention, you should contact your card provider.
How else can I keep protected?
If you don’t have a credit card then there is another way you can keep protected too.
While Section 75 doesn’t cover debit cards or payments under £100, you might be protected via something called chargeback.
Chargeback is part of Visa’s, Amex’s and Mastercard’s own rules and if there is an issue with a product or service, then they’ll essentially ask the retailer’s bank for the money back.
You should be able to get money back via chargeback for reasons like if the company goes bust, if the item is faulty, if it wasn’t delivered or if there’s a clerical error.
This however isn’t a legal right, so if you’re making a big purchase it’s always best to use your credit card to make sure you’re covered.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk