Using A Credit Card For Safe Puchases Instead of Paypal

theFlash

Thinking about getting a credit card to:

1. (mainly) provide a way of getting my money back in case of dispute/scam
2. earn points for purchases

I usually use Paypal to purchase for reason (1), but having recently attempted a chargeback following a dispute with a seller, they immediately refused as it was past 30 days. Fortunately the bank helped.

However it showed to me that using Paypal as an intermediate did not give me the security I thought.

So looking at credit cards (like Amex), what should I be aware of? Would they have the same problem with time limits etc?

For example, funding the Paypal with Amex probably wouldn't be any better than now I presume?

Would it be more secure, in terms of any disputes, to pay via Amex directly?

Also, Amex is not accepted in as many places as Visa - is there an alternative for such uses?

Sorry - a load of questions, but you get the gist.

CliveOfIndia

A credit card offers both Chargeback protection and S75 protection, subject to the standard rules. S75 is only applicable if the individual items costs between £100 and £30,000, and covers you in cases where the supplier has breached their contract with you.

Some credit cards offer rewards - cashback, points of some kind, whatever. If you're eligible for such a card, choose one that gives rewards that are useful to you - there's no point collecting airmiles, for instance, if you never or only very rarely fly.

In most countries there's little difference between Visa and Mastercard in terms of where they're accepted. Amex, as you say, can tend to be a little more restricted in terms of where it's accepted.

If you're going to be making non-Sterling transactions (whether on holiday abroad or buying things from non-UK websites), look for a card that doesn't charge FX fees.

There's some useful information on the main MSE website about both rewards cards and "travel" cards.

Emmia

Funding PayPal with the credit card breaks the chain so the card company wouldn't be jointly liable if you had a problem and wanted to make a claim (assuming the item is over £100 and less than £30k)

If you get a credit card, you stop using PayPal... Are you using PayPal to spread the cost e.g. a pay in 3 arrangement?

born_again

Even with a CC you may not get your money back.

imtiazahmad

Yeah, you’re thinking in the right direction. Paying straight with a credit card is usually safer than going through PayPal because you’ve got proper protection if something goes wrong, and PayPal can be quite strict with their time limits and rules. Amex is probably the best for refunds and customer service, but it isn’t accepted everywhere, so people often use it where they can and keep a Visa or Mastercard credit card as a backup for everywhere else. Funding PayPal with a card doesn’t really add much extra protection, so it’s better to just use the card directly when you can.

theFlash

https://forums.moneysavingexpert.com/discussion/comment/82021495#Comment_82021495

Thanks. No just for extra guarantee if somethings goes wrong, not to spread costs. Never had to use guarantee until recently, when they denied the claim due to time, but the bank successfully did a chargeback through paypal (confusingly)

retiredbanker1

Be wary of Paypal and disputes.

If Paypal have to refund out of their own pockets then expect them to restrict or close your account.

theFlash

https://forums.moneysavingexpert.com/discussion/comment/82022190#Comment_82022190

Thanks. So do you think a credit card is a better way to protect against these issues? (which has been rare but usually for me its not receiving goods/services or not offering a replacement/refund when entitled to)

retiredbanker1

https://forums.moneysavingexpert.com/discussion/comment/82022194#Comment_82022194

100% it is.

However they are not a safety net for stupidity - if it is obvious that a site you are ordering from is bogus you will need to jump through hoops to get your money back.

In over 40 years of using credit cards I can only think of once or twice I have had a major problem.

Stick to sites you know; and ones you are unfamiliar with; Google them first for reviews.

theFlash

https://forums.moneysavingexpert.com/discussion/comment/82022204#Comment_82022204

Thanks. I'm afraid it wasn't stupidity (I like to think) in the two cases I experienced, and the bank agreed thank goodness or it would have been small claims court in both cases.

lr1277

Credit cards offer S75 and chargeback. Debit cards offer chargeback. I think there are time limits to both but I can’t remember what they are.

The main difference between the two is that for S75, any money you get back comes out of the card company’s pocket. Based on reading threads on these boards, some card companies make it very difficult for you to get your money back. Now some may say you have statutory rights, which you do, but then you may have to follow a legal process of letters and/or court to get your money. How much time and effort are you willing to put into this?

With chargeback, the card company takes the money out of the merchant’s bank account, which to the card company is preferable as it costs them less/nothing. But the merchant can make their case and the money might be returned to the merchant, in which case you are now out of pocket again.
Which is why in my view is buy from reputable suppliers with a clear and easy to use returns policy. Don’t expect the card company to pay you for any lack of due diligence on your part.

A now defunct card company once paid my money back when a travel agent I used went bust. I put in a S75 claim and not submitting a chargeback request as the card company initially requested as I misunderstood the timescales involved. I don’t know if I was paid under S75 or chargeback, but I was paid. I mention travel agent because this broke the debtor creditor relationship required for S75. It could be I was paid because the travel agent didn’t do what they were supposed to which was make a hotel booking and pay for it. Pure speculation on my part. The card was a joint something or other between HSBC and John Lewis. I am making no promises but M&S have a similar arrangement with HSBC, so they may provide a similar level of customer satisfaction.