Debit or credit: the protection gap nobody explains at the till
Same purchase, same shop, same day. Radically different protection if it goes wrong.
Head of Consumer Guidance
Two people buy the same $4,000 sofa from the same retailer on the same afternoon. One pays by debit card. The other puts $200 on a credit card and transfers the rest. The retailer collapses before delivery.
The second is in a substantially stronger position, and neither was told why at the point of sale.
What debit cards give you
Chargeback, and that is all. It is a genuine and useful protection. no minimum value, and it reaches overseas sellers a UK court cannot. But it is a card scheme rule rather than a legal right, and the window is generally 120 days.
What credit cards give you
Chargeback and Section 75. Section 75 makes the provider jointly liable with the retailer, runs for six years in England and Wales and five in Scotland, covers consequential losses, and survives the retailer's insolvency.
Where the gap really bites
Long lead times. Furniture, kitchens, vehicles and weddings are frequently ordered months ahead. A debit card claim can expire before the problem becomes apparent. Section 75 will not.
Business failure. Both routes survive insolvency, but chargeback's short window means a business failing eight months after taking your deposit may leave you with nothing on a debit card and years of room on a credit card.
Losses beyond the price. Chargeback returns what you paid. Section 75 can cover what the breach cost you, which on a botched installation is often considerably more.
The practical habit
For any purchase over $100 where delivery or performance is in the future. anything you are not walking out of the shop with. put at least $100 of it on a credit card.
You do not need to finance the purchase. Pay $150 on the card, pay the rest however you like, and clear the balance that week. No interest, and you have converted an unprotected payment into one where a regulated institution is jointly liable for the whole contract.
The cash price of the item needs to be over $100, not the card payment. That is the whole thing, and it is not a trick. it is simply how the section works.
Other payment methods
| Method | Chargeback | Section 75 | Notes |
|---|---|---|---|
| Credit card | Yes | Yes | Strongest protection available |
| Debit card | Yes | No | Chargeback only, 120-day window |
| Prepaid card | Usually | No | Depends on the scheme |
| Bank transfer | No | No | APP reimbursement only if it was a scam |
| Cash | No | No | No payment protection at all |
| Buy now, pay later | Varies | Usually not | Check whether it is regulated credit |
When a trader asks for a transfer instead
A trader offering a discount for a bank transfer is asking you to give up your protection, and pricing it. Sometimes that is simply about card fees. Sometimes it is not.
On a large purchase, keeping at least $100 on a credit card is worth considerably more than the discount. If a trader refuses card payment entirely for a substantial job, treat that as information about the trader.
Topics
Ben Whitfield
Head of Consumer Guidance
Ben writes the guides and templates that let people run their own claims without paying us anything. He is aware of the tension in that and considers it the point.
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