Credit cards have taken a lot of indirect flak in recently months, mainly due to the turmoil in the world of finance that is blamed largely on irresponsible spending and lending, helped – in part – by our use of credit cards.

However, it should not be forgotten that it was not the use of credit cards that got us into trouble, but the irresponsible use; like so many things in the world, credit cards are great when used sensibly and with some foresight. In this post I will outline some advantages to using credit cards within merchant services, with regards to the protection they offer the comsumer.

When you make a purchase on a credit card you are essentially letting the credit card provider pay for the purchase and agreeing to pay them back within a a grace period. This method of delaying payment acts as a protective buffer against fraud, dodgy dealings and good old fashioned incompetence. Because it is the credit card provider that has made the payment, you have invested nothing until you make the repayment - giving you time to ensure that the product arrives if it is being sent, that you have not been charged twice or been otherwise messed around. If it turns out that something has gone wrong, you are actually under no obligation to pay the credit card fee until the issue has been resolved. In fact, you have the right to refuse to pay and leave it up to the credit card provider to claim their money back and, let’s be honest, merchants are more likely to bend over backwards for Visa than they are to appease you!

To give you a personal example; my band and I spent two months in California this summer and purchased our plane tickets online with debit card. Just before we were due to return home we got the news that Fly Zoom had gone bankrupt and taken our tickets with it! Had we paid on credit card, we would have been entitled to a refund; as it was we were forced to accept the loss of hundreds of pounds-worth of tickets and buy new tickets home from Virgin! In cases like this, there is no substitute for the protection offered by credit cards!

It’s not just when the merchant goes wrong that you are protected with a credit card either; in the cases of loss, for example, purchases made on a credit card can be replaced, repaired or even fully refunded, usually within 90 days of purchase. Naturally this does not cover the simple misplacing of an item, but loss through fire, floods, theft and so on – the specifics are variable. Nevertheless, free insurance for a few months is definitely not to be sniffed at! What’s more, you can actually register your purchases with the warranty management service and get an extra year of warranty protection on your purchases as well!

The key to getting the most out of the protection offered by your credit card provider is knowing the services on offer as well as your own rights. The delayed payment offers a means by which you can argue your case without having your money taken from you.

In the next post I shall cover other advatanges of using credit cards - namely the massive convenience!