Martin Lewis gives advice on how to get the best credit card rates
Credit card spending shot up throughout the summer as the first lockdown was eased and consumer confidence grew. In the third quarter of 2020, credit card spending rose by 17 percent according to UK finance.
Unfortunately, these figures may drop for the first few months of quarter four as the government was forced to introduce a second lockdown.
However, if history is to repeat itself, the UK may see another dramatic rise as the economy opens back up again and shoppers are let loose on British highstreets.
This could be made even more dramatic by the fact that Christmas is on the horizon.
Despite this demand, new research from Barclaycard revealed consumers are unaware of a key piece of credit card legislation which could save them huge sums of money.
We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
Credit card users have their purchases protected by a UK consumer protection law introduced in the 1970s.
In a nutshell, this law means credit providers are required to take the same responsibility as retailers if things go wrong with a purchase.
This covers items costing between £100 and £30,000 and the law will ensure buyers aren’t required to pay off debt for an item which never arrives or proved to be faulty.
This law is often dubbed the “section 75” rule as it comes from section 75 of the Consumer Credit Act 1974, which detailed the following: “If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.”
Debt warning: Government urged to change as families struggle [INSIGHT]
Martin Lewis warns against debt consolidation – credit card fears rise [EXPERT]
Payment holiday warning: Credit scores to ‘fall off a cliff’ [WARNING]
Despite the usefulness of the law, new research from Barclaycard shows many people in the UK are unaware of the benefit, which could lead to some being unwilling to utilise their credit cards or at worst be taken advantage of by unscrupulous vendors.
According to new research from Barclaycard:
- The majority of British people have not heard the term Section 75 (65 percentage).
- Additionally, eight percent of Brits who have heard of Section 75 said they did not know what it was for.
- Only a very small proportion of Brits (three percent) say they are aware and have benefitted from using Section 75, meaning the majority of shoppers are missing out on one of the best benefits of shopping with a credit card.
Fortunately, Raheel Ahmed, the Head of Consumer Products, shared his tips on how consumers can make the most of their shopping options ahead of Christmas.
This of course started with ensuring consumers get up to date with their section 75 cover but he then moved on to budgeting concerns.
Spread the pressure
Many consumers likely think of Christmas as a large one off expense and/or period but Raheel explained this need not be the case: “The festive period is an expensive time and many of us budget for it months in advance.
“However, for Christmas shoppers who may have struggled to save as much as they’d like this year, if they have a credit card and can afford the repayments, they could benefit from putting festive spending on it, and paying their balance off over the following months.
“If managed carefully, credit cards can provide a useful way of spreading the cost of Christmas in 2021.”
Spend within your means
Of course, any financial debt is made easier when restraint is exercised in the first place and the importance of this was laid out by Raheel: “Don’t forget, whatever goes on your credit card, must come off – so make sure you are planning ahead to work out what an affordable and manageable repayment amount is, and how long you want to be paying this off for. . This will help you to calculate your festive budget, and stick to it.”
Make the most of automatic repayments
Raheel concluded by urging consumers to get organised: “Setting up automatic repayments is a good way to ensure you’re meeting the requirements of your credit card.
“You can set this to be the minimum each month, and then depending on finances, or the amount you have set aside for repayments, you can always make additional payments to pay off the balance quicker.”
Source: Read Full Article