Paying safely
Section 75 deposit protection: how £100 on a credit card covers the whole job
Under Section 75 of the Consumer Credit Act 1974, paying any part of a purchase by credit card — even a £100 slice of the deposit — makes the card issuer jointly liable for the whole contract, as long as the cash price is between £100 and £30,000. If the supplier fails or breaches the contract, you can claim the full amount from the card company, including everything you paid by bank transfer.
Key facts
- Section 75 applies where the cash price of the item or service is over £100 and not more than £30,000 — the amount actually paid on the card does not matter (Consumer Credit Act 1974, s.75).
- The card issuer is jointly and severally liable with the supplier for breach of contract or misrepresentation: you can claim against either, for the whole loss.
- It works when the supplier has gone bust — that is its main use for deposits.
- It applies to credit cards and store cards, not debit cards (debit cards have chargeback instead) and not charge or prepaid cards.
- There is no time limit in Section 75 itself; claims are subject to the ordinary six-year contract limitation, and the Financial Ombudsman Service is free if the issuer refuses.
How Section 75 works
When you buy on credit, the law treats the card issuer as a party to the deal: section 75 makes the issuer answerable for the supplier’s breach of contract or misrepresentation, jointly and severally. “Jointly and severally” means you do not have to chase the supplier first, prove it is insolvent, or split the claim — you can simply claim the whole loss from the card company. The issuer then recovers from the supplier, or doesn’t; that is its problem.
The £100–£30,000 rule is about the price, not the payment
The thresholds apply to the cash price of the item or service. Pay £100 of a £9,000 kitchen by credit card and the whole £9,000 contract is within Section 75. Pay £5,000 of a £35,000 extension by credit card and none of it is — the price is over the cap. This single detail is why the advice “put at least £100 of the deposit on a credit card” appears in every guide we publish.
Why it is perfect for deposits
A deposit is money paid before anything exists to show for it, usually to a small company whose balance sheet would not cover it. Paid by bank transfer, it is unsecured: if the firm fails, you join the back of the creditors’ queue — the outcome described in our guide to transfers to a company that went bust. Paid even partly by credit card, the risk moves to the card issuer, an institution that can afford it. The firm’s balance sheet stops mattering to you.
That is why the deposit guidance in every SafeToPay report, whatever the verdict, includes the same first line: pay the first £100 or more by credit card. It converts an unsecured loan to a small business into a claim against a bank.
What is covered — and what is not
| Situation | Section 75? | Notes |
|---|---|---|
| Supplier goes bust before delivering; deposit partly on a credit card | Yes | The core case — claim the full loss from the issuer |
| Work done but seriously defective (breach of contract) | Yes | Cost of putting it right, up to the loss |
| “20 years’ experience, own workshop” turned out to be false and induced the contract | Yes | Misrepresentation is covered alongside breach |
| Cash price over £30,000 (large extension, full renovation) | No | Consider splitting genuinely separate contracts (units vs fitting); stages and direct supplier payments are the protection |
| Paid by debit card | No | Use chargeback instead — 120-day window, amount paid on the card only |
| Paid via PayPal balance or friends-and-family | Usually no | The intermediary can break the debtor–creditor–supplier chain; PayPal goods-and-services has its own 180-day protection |
| Card payment link (Stripe, SumUp, Square) paid with a credit card | Generally yes | Treated as paying the supplier by card; keep the receipt showing the supplier’s name |
| Second cardholder paid, main cardholder claims | Yes on the same account | A payment by someone else’s card on a different account is not your claim |
The ways the protection breaks
The price cap
£30,000 is the ceiling on the cash price. A £42,000 project is outside Section 75 entirely — but a £14,000 kitchen contract and a £28,000 building contract with different suppliers are two prices, each within it. What does not work is artificially splitting one supplier’s one job into “two invoices”.
The wrong instrument
Debit cards, prepaid cards, bank transfers and most buy-now-pay-later products are outside s.75. Credit cards and store cards are inside. If the firm “doesn’t take credit cards”, ask for a payment link — every small business can have one in minutes, and a refusal is itself information.
The broken chain
Section 75 needs a debtor–creditor–supplier arrangement: your card, the credit, the supplier. Paying a middleman that is not the supplier’s payment processor — a PayPal personal transfer, a marketplace wallet, a friend who “puts it on his card” — can break the chain. Pay the supplier, by card, in the supplier’s name, and keep the receipt.
How to claim, step by step
- Gather the paper: contract or quote naming the supplier, the card statement showing the payment, invoices, photos, and the evidence of failure — the liquidation notice, the abandoned site, the survey of defects.
- Write to the card issuer (most have a Section 75 form online): state the cash price, what was paid and how, what went wrong, and the amount you claim. Say the words “claim under Section 75 of the Consumer Credit Act 1974”.
- Claim the whole loss, not just the card payment: deposit paid by transfer, extra cost of finishing the job with another firm, directly caused losses.
- Expect questions, not instant payment: issuers typically respond within a few weeks and may ask for an independent report on defective work.
- If refused or ignored for 8 weeks, take the final response to the Financial Ombudsman Service — free, online, and the ombudsman applies Section 75 routinely.
- In an insolvency, also register with the liquidator — the issuer may require it, and it costs nothing.
The £13,600 kitchen, replayed with Section 75
The studio from our kitchen deposit guide: eleven months on the register, net assets £2,100, asking £6,800 up front. Paid by transfer, that deposit is an unsecured loan to a company worth £2,100. Paid as £100 on a credit card and £6,700 by transfer, the whole £13,600 contract sits under Section 75: if the studio folds mid-order, the claim goes to the card issuer — the studio’s balance sheet has become irrelevant. Same firm, same deposit, different risk.
Enter a website address, e.g. aurelia-kitchens.co.uk
Frequently asked questions
Does Section 75 work if I only pay part of the deposit by credit card?
Yes. The £100–£30,000 test applies to the cash price of the goods or service, not the amount on the card. £100 on the card brings the whole contract within Section 75, including everything paid by bank transfer.
Does Section 75 apply to a builder or a sole trader?
Yes. It depends on the card and the price, not the supplier’s legal form. A £15,000 loft conversion by a sole trader paid £100 by credit card is covered exactly as a company would be — useful, since a sole trader has no accounts to check.
Is there a time limit on a Section 75 claim?
Section 75 itself has none; the ordinary six-year limitation for contract claims applies (five in Scotland). Claim as soon as the breach is clear — evidence is freshest and the ombudsman route stays simple.
What if the job costs more than £30,000?
Section 75 does not apply above a £30,000 cash price. Genuinely separate contracts — kitchen units from one supplier, building work from another — are judged separately. Otherwise the protection is structural: stages against work done and paying long-lead suppliers directly, as in our builder deposit guide.
Credit card or debit card for a deposit — which is better?
Credit card, for anything between £100 and £30,000: joint liability for the whole contract beats chargeback’s 120-day, card-amount-only protection. Pay the card off in full the same month and the protection costs nothing.
The firm says it doesn’t take credit cards. Now what?
Ask for a card payment link — Stripe, SumUp and Square give any business one in minutes, and the fee on £100 is about £2. If a firm taking four-figure deposits refuses a £2 fee, weigh that with everything else you have checked.