Christmas on Credit – Know Your Rights

With Christmas, Black Friday, and Cyber Monday deals all vying for your attention, many people rely on credit to manage these costs, but understanding your rights under the Consumer Credit Act can help you shop confidently. Whether using credit cards, Buy Now, Pay Later services, or financing options, knowing what protection is afforded to you under the Consumer Credit Act will ensure a stress-free festive shopping experience.

What does the Consumer Credit Act Cover?

The Act covers most household borrowing including credit cards, store finance, catalogues and payday loans.

What Should I Be Told Before Entering into a Credit Agreement?

Before you agree to any form of credit, the lender must provide you with clear information about the agreement. This includes the total amount to be paid, interest rates, repayment terms, and any fees or penalties for late payments. Understanding this information is crucial to ensure you know exactly what you’re agreeing to and can make informed decisions.

What Is Section 75 of the Consumer Credit Act?

Section 75 offers protection for purchases made using a credit card between £100 and £30,000. Whether you’re shopping for Christmas gifts or snagging Black Friday deals, if something goes wrong with your purchase, you can claim a refund from your credit card provider. This applies if the item is faulty or if the seller goes out of business, providing extra security for expensive shopping purchases.

What About Interest-Free Finance Agreements?

Retailers often offer interest-free finance deals during the holiday season, particularly for larger purchases. Make sure to read the terms and conditions carefully before signing up. Be aware of interest rates after the promotional period ends, and understand any fees for late payments.

Do I Have a Cooling-Off Period for Credit Agreements?

When taking out credit, such as for a Black Friday or Cyber Monday deal, you typically have a 14-day cooling-off period in which you can cancel the agreement without penalty. This can be especially useful if you change your mind or find a better deal elsewhere.

If I Cancel the Credit, What Happens to the Goods?

If you cancel a credit agreement, you may also need to return the goods purchased with that credit. The terms of return will depend on whether you are still within the retailer’s returns window. Always check the return policy to understand your responsibilities regarding any items purchased.

What Are My Rights If I Get Into Financial Difficulty?

If you find yourself struggling with repayments, it is important to reach out to your credit provider as soon as possible. Under the Financial Conduct Authority’s guidelines, lenders are expected to offer support, such as developing a repayment plan that suits your situation.

How Does Buy Now, Pay Later Affect My Rights?

Buy Now, Pay Later (BNPL) services are popular for Black Friday and Christmas shopping but may not offer the same protections as credit cards. While these services can make gift-buying easier, missing a payment can lead to significant penalties. Carefully review the terms before deciding to use a BNPL service.

Paying by Debit Card vs. Credit Card

If you opt to pay using a debit card, you may have the option to use Chargeback. Unlike Section 75, this is not a legal right but rather a voluntary scheme offered by banks. Chargeback can help recover your money if a product is faulty or doesn’t arrive, but it is not as robust as credit card protections. Check with your bank to understand how to initiate a Chargeback claim if necessary.

On the other hand, paying with a credit card offers stronger protections under Section 75 of the Consumer Credit Act. For purchases between £100 and £30,000, your credit card provider shares responsibility with the seller for the goods or services you buy. This means that if your product is faulty, doesn’t arrive, or if the retailer goes out of business, you can make a claim with your credit card provider for a refund. This protection applies even if only part of the purchase was made with a credit card, making it a safer option for large or important purchases.

Additionally, many credit card providers offer purchase protection beyond the legal requirements, such as extended warranties or fraud protection, further safeguarding your transactions during high-spending periods like Black Friday and Christmas.

Summary

Whether you are splurging on Black Friday deals, picking up gifts for Christmas, or snagging discounts on Cyber Monday, using credit wisely and understanding your consumer rights is crucial. Remember to be mindful of your repayment capabilities, explore your protections, and keep your festive spending under control for a happier new year.

Butcher & Barlow have a team of Dispute Resolution specialists who are happy to assist whatever your circumstances. Please do not hesitate to get in touch via enquiries@butcher-barlow.co.uk or email your legal adviser directly.

For more information, or to discuss a specific query, contact Thomas Sedley on 0161 764 4062 or email tsedley@butcher-barlow.co.uk