Why your plastic may offer you a protective shield

The Hire for Lower/Autos Abroad fiasco is a stark reminder of the benefits of paying for expensive items such as holidays with a credit card.

Under Section 75 of the Consumer Credit Act, your credit card company is jointly liable with the supplier if there is a problem with goods or services - but only if the price of the item is between £100 and £30,000.

It doesn't matter how you buy the goods or services - in a shop, mail order, by phone or over the internet - the protection is the same. The law doesn't apply to debit or charge cards, although some voluntarily offer protection.

The Office of Fair Trading says this is one of the most useful consumer protection laws as it enables shoppers to make a claim from a credit card issuer if a supplier goes out of business or otherwise fails to give satisfaction.

The £100 rule applies to an individual item or several items sold as a set. So, if you spent £200 on car hire or £1,000 on a holiday, you're covered. But if it was four concert tickets costing £30 each, you're not.

There may be another way of getting your money back. If you buy something on plastic and the goods are faulty or don't turn up, contact your card company. They will go to the bank that deals with the merchant's credit card transactions and request the money back.

The merchant's bank is obliged to credit the card-holder's account under rules laid down by the UK card payment systems. This process is known as "chargeback".

But chargeback claims must be made within a certain period of time after the purchase. This can vary between about one and five months, depending on the card.