How do Credit Cards work?

A credit card is a physical payment card that allows you to borrow money from a bank or financial institution, to purchase things and pay for them later, either in one go or by instalments.

What is a balance transfer?

A balance transfer is moving a credit card balance from one provider to another, often with a lower (or 0%) rate of interest for a set period. This could help you reduce your monthly payments or clear your debt quicker, but it’s important to note that there may be a fee to transfer a balance and you should consider the costs you will pay when any introductory offer expires. For more information take a look at our guide on what is a balance transfer credit card.

Eligibility criteria applies. Over 18s only

Click to find out more about our Balance Transfer Credit card options

What is a credit score?

Your credit score helps lenders decide whether to lend you money, how much to lend you and how much interest to charge. The higher your score, the better.

Lenders can access a credit file that gives them information about your outstanding borrowing, financial commitments and the way you currently manage any bank accounts, loans and credit cards.

Here's some more information on your credit score and how to improve it.

What is a credit limit?

A credit card limit is the maximum amount you can spend on a credit card. We assess credit limits on a customer-by-customer basis and look at your income, debt level and credit history to make sure that we offer a responsible limit for your credit card spend.

What is a chargeback?

If you have a dispute when you have made a purchase with your credit card, you may be able to make a claim using the Chargeback dispute process or Section 75 of the Consumer Credit Act.

Chargeback allows us to provide you with a refund in a number of circumstances, including:

• If you do not get the goods or services you paid for, including if the company has gone out of business
•  If goods or services turned out to be faulty, counterfeit, or defective (you may need to return the goods in order to get a refund in this case)
• If you are charged the wrong amount, or charged twice by mistake
•  If you are charged for a repeat payment after cancelling a subscription

What credit card payment protection do I get from Section 75 of the Consumer Credit Act?

If you use a credit card to buy goods or services, then the transaction could be covered by Section 75 of the Consumer Credit Act.  This means that your credit card provider and the retailer or supplier may be equally liable for compensating you if something goes wrong. You may be able to make a claim under Section 75 where:

• the cash price of the goods or services is over £100 but not more than £30,000 (the £100 minimum amount applies to each item or set of items that you buy rather than the total bill- so for example, if you bought two items that together cost more than £100, but each cost less than £100, Section 75 would not apply)
• all or part of the purchase was made using a credit card (even if it is just the deposit)
• there has been a breach or misrepresentation of your contract (i.e. where the goods or services were not as described, were faulty or were not received at all) or
• the retailer or supplier goes into administration before you've received your goods or services 

Unfortunately, Section 75 of the Consumer Credit Act was intended to apply to private individuals, sole traders and partnerships only. Claims made by companies and limited companies are not covered under Section 75 of the Act.

It’s important to note, firstly, that liability under Section 75 arises in certain circumstances., Charge cards are not as classified as credit card, and therefore, is not covered by the terms of Section 75.