Martin Lewis: How spending £1 on credit card can save £30000

One of the most important laws we have is the Consumer Credit Act 1974 (CCA) which covers the rules around credit, how it’s sold and what happens if things go wrong.

It offers some pretty brilliant protection, as long as some simple rules are met.

• If you pay for goods or services on a UK credit card that cost between £100 and £30,000, the credit card provider is jointly responsible, along with the supplier, for any breach of contract or misrepresentation.
• This can involve goods not turning up, items that are damaged or don’t do what they are supposed to do or situations where you’ve been a victim of fraud.

You’re even covered if you’ve only paid for a deposit for something on your credit card – so that could just be £1 – as long as the total cost of the goods is between £100 and £30,000.

Even though you only paid a pound, you’re still covered for the whole value of the item in question – so that one pound protects the other £29,999. 

That’s all well and good for UK purchases, but, how about if you buy something overseas, Martin was asked by a guest at the Ideal Home Show at Olympia London (which runs until Sunday April 6). 

“As long as it’s a UK credit card, it covers purchases anywhere in the world,” he explained, but added: “I am actually awaiting an answer from the regulator at the moment, as to whose consumer rights it replicates. If you bought something in Brazil, is it Brazilian consumer rights that a UK card replicates or is it UK consumer rights that the card replicates? Nobody knows, including me because I can’t get confirmation.

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“But you’ve got consumer rights and frankly most of them act as if you have the same consumer rights abroad.

“They always fight you on this, so be prepared – but yes, it applies to any purchase in the world unless there is a break due to an intermediary.

“There has to be (in section 75) a direct link between the purchase and the debt. You can’t take a loan out and buy something with it and say ‘I want to go and buy the loan’ because you’ve been given money, and you’ve paid with the money.”