Credit card for one off purchase

cazziebo

DH and I don't have separate bank accounts, but for some reason I can't remember, we have two shared credit cards. He gets the statements and I pay for my purchases. All good.

I want to pay for a secret holiday for his milestone birthday. It will cost around £5k. I have that in my bank account (thanks, Martin :money: ) but would like the protection a credit card gives to booking flights and hotels. Would it be possible to get a credit card with that kind of limit on it, and pay it off immediately? Potential fly in the ointment, I'm self employed but good regular income.

Willing2Learn

I don't believe you need a high limit for s75 protection. You can make a paltry £1 deposit using a credit card, and then you will be fully covered by s75 (as long as the full value of the item being purchased is over £100).

[Deleted User]

You’re better off getting travel insurance to cover any flight and hotel incidents.

They’re more inclined to payout than a credit card claim

Terry_Towelling

Not fully certain about this but my understanding is that for S75 coverage, the debtor has to be the prime beneficiary of the purchase. So buying for you and your OH on your card would only cover you under S75.

Conversely, buying for you and OH on his card account would only cover him under S75.

Willing to be contradicted/corrected on this point.

There are also S75 issues when using agents for travel purchases.

I hope OH likes the idea of a surprise holiday costing that much.

Voyager2002

I think it would be a much better idea to discuss the holiday in vague terms, keeping the details as a surprise. That would enable you to use the established credit cards. It would also avoid any awkward conversations if it turned out that he had other ideas about the best way to spend so much money.

eskbanker

Terry_Towelling wrote: »

Not fully certain about this but my understanding is that for S75 coverage, the debtor has to be the prime beneficiary of the purchase. So buying for you and your OH on your card would only cover you under S75.

Conversely, buying for you and OH on his card account would only cover him under S75.

Willing to be contradicted/corrected on this point.

I don't believe there to be any such stipulation in either the legislation itself or in its usual application, although I have seen posters making similar assertions before on here (perhaps that's where you've got the idea?).

The purchase has to be made in the name of the debtor, i.e. the account holder responsible for the debt, as purchases made by a secondary cardholder are known to be excluded, but there are certainly precedents within FOS decisions of family holidays being covered, for example.

Terry_Towelling

eskbanker wrote: »

I don't believe there to be any such stipulation in either the legislation itself or in its usual application, although I have seen posters making similar assertions before on here (perhaps that's where you've got the idea?).

The purchase has to be made in the name of the debtor, i.e. the account holder responsible for the debt, as purchases made by a secondary cardholder are known to be excluded, but there are certainly precedents within FOS decisions of family holidays being covered, for example.

Happy to be contradicted/corrected. My thinking came out of the recent rash of 'do-business-purchases-have-S75-cover' threads. Opinion was split over whether a business could be a consumer. The upshot of all that debate seemed to indicate that any individual being the primary beneficiary of a purchase would be defined as a consumer for the purposes of the act.

I know we are not talking about businesses here but presumably the logic carries through and to be classed as a consumer for the purposes of the act the debtor has to be the primary beneficiary of the purchase.

If you have an additional cardholder on your CC account and they buy something for themselves, you are still the debtor but you are not the primary beneficiary of the purchase, hence you have no CCA protection. If your additional cardholder buys something for you, you are the debtor and you are also the primary beneficiary of the purchase so you do have CCA coverage.

If you buy a holiday for, say, your parents, you are not a beneficiary (at all) of the purchase so you have no CCA coverage. Ergo, if you buy a holiday for yourself plus one other, you are only a beneficiary of half the purchase, so you would qualify as the primary beneficiary of your half only.

Just a thought.

chattychappy

eskbanker wrote: »

I don't believe there to be any such stipulation in either the legislation itself or in its usual application, although I have seen posters making similar assertions before on here (perhaps that's where you've got the idea?).

I agree... it has always floated around here, but nobody seems to be able to point to anything that backs it up.

I do remember an argy-bargy over whether Christmas presents are covered by S75. The argument being that you have no lost "benefit" against which to make a claim. I'm pretty sure it was settled when somebody found an FOS ruling. (Though that's not really binding.)

My interpretation is that it is the borrower that must be on the contract (ie on any bill/invoice). Then, subject to the usual provisos, S75 kicks in. The quirk of this is that if an additional cardholder pays for something on behalf of the primary cardholder, then S75 also applies.

Presumably buying a holiday for multiple people works because the cardholder enters into a single contract to provide those people with the holiday rather than as agent for those people individually entering into individual contracts. But I know that holidays/flights are a complicated area and I should speculate off-the-cuff.

chattychappy

Terry_Towelling wrote: »

Opinion was split over whether a business could be a consumer.

(Your post crossed with mine).

I think the split was over whether the status of the transaction was was relevant. Perhaps we are split as to the nature of the split...

People argued (erroneously in my view) that if it is a "business purchase" (or a business benefits) then because it's the "consumer credit act" then you won't be covered.

My view is that CCA1974 governs certain types of credit agreements NOT types of transaction. If one of these agreements (eg a consumer credit card) is then used to make a purchase, you are covered provided the legal person that entered into the transaction is the legal person that entered into a CCA1974 agreement. So something purchased by a sole trader is covered. Something purchased by a Ltd company and paid for a by a cardholder is NOT covered. Something purchased by a cardholder that benefits a business (eg flight tickets - where the contract is with the cardholder, even though the cardholder might be able to reclaim the cost) IS covered. The CCA1974 doesn't include/exclude transactions by reference to who benefits or whether it is a "business" transaction.

A complication might be where CC T+Cs state that purchases mustn't be for business, but I suspect that wouldn't get them off S75 liability.

Probably shouldn't have regurgitated all that. But it's done now.

Ben8282

It may or may not be possible for you to get a credit card of your own with a sufficient credit limit. That will depend on your credit history but as you don't currently have a credit card of your own you may experience difficulty. The best solution would be to use an eligibility checker to get some sort of idea of your chances.
I would also agree that it may not be a good idea to spend this sort of money on a secret surprise holiday but you know your husband and his likely reaction better than anybody else .

eco_warrior

Or just pay by debit card?

S75 claims for these purchases are minimal as a chargeback will cover the travel agent or airline going bust.

The only downside of paying by debit card would be losing any claim for consequential loss that you could potentially get by paying by CC. But again the likelihood is very small imo.