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Problems with credit cards

About problems with credit cards

This information tells you about some of the problems you may have with credit cards and what you can do. It includes information about the extra protection you get when you use a credit card to buy things as well as tips to help you avoid credit card fraud and help if you can't keep up with payments.

Effect of credit cards on your credit rating

Applying for too many cards or regularly switching cards can have an effect on your credit rating. Each time you make an application it is recorded on your credit file and if the application is refused it will also show on the file. When new providers check your credit file, it can look like you have lots of cards already or that no-on else wants to lend to you.

For more information about your credit rating, see Being refused credit in Credit.

For more information about what to do if you are struggling to pay what you owe on a credit card or other type of borrowing, in England, Wales and Northern Ireland see Help with debt. In Scotland see Help with debt.

Extra protection when you buy on your credit card

If you pay for goods or services by credit card and things go wrong, you may be able to make a claim against the credit card company instead of the company which sold you the goods or services. For example, you may have bought a washing machine which is faulty or your internet connection isn't working properly.

To be able to claim, the goods or services must cost more than £100 and less than £30,000.

This can be useful where the trader or supplier has gone out of business or has no money to compensate you.

You should keep the credit card provider informed if you are having difficulties with the supplier over faulty goods or services.

If the credit card company won’t accept responsibility, you can make a complaint to the Financial Ombudsman Service.

For more information about the Financial Ombudsman Service, see How to use an ombudsman.

If you are having problems over faulty goods or services bought on your credit credit you can get help from an experienced adviser, for example, at a Citizens Advice Bureau. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB.

Credit card fraud

Credit card fraud is a big problem. It’s your responsibility to protect your card and use it safely. If you think your card details have been copied or stolen tell your card provider straight away.

Follow these basic rules to help reduce the risk:

  • Don’t let anyone else know your PIN (personal identification number). Your PIN is the security number you get with your credit card. You will be asked to input your PIN when you buy something with your card or withdraw money from a cash machine (ATM). If you think someone knows your PIN tell your card provider straight away. If you don’t, and someone else uses it, you may have to repay the money owed.
  • Keep your card in sight. When you are paying for things in shops, restaurants or anywhere else, you should be able to see what is happening with your card at all times. If your card is taken away from you, it could be skimmed. This is where the information in the magnetic stripe on the back of your card is copied to be re-used illegally. If you think this has happened, contact your card provider straight away.
  • Check your statement each month. Make sure all the spending records are correct and talk to your card provider about any spending you don’t recognise
  • Shred your payment receipts. Your payment receipts show some details about your card. Shred them if you can or tear them into small pieces so that no-one can steal your details
  • Use secure websites for online purchases. Make sure that you are making payments over the internet to a secure website. Look for a padlock next to the website address at the top of the internet page
  • Use an online verification scheme. For extra security your card provider may suggest you use an online verification scheme, either Verified by Visa or MasterCard SecureCode. You set up an additional password which you key in when shopping online. The password is then verified by your card provider before your payment is completed. There is more about online verification schemes on the Shop safe online website www.shopsafeonline.org.uk.
  • Report lost or stolen cards immediately. The contact number for reporting lost or stolen cards will be on your last credit card statement or on your provider’s website. If you have card protection insurance you should contact the insurance company as well.

Complaining about your credit card provider

If you are not happy with the service offered by your credit card provider you can make a complaint. Complain to the credit card company first to give them a chance to put things right. If you are still not happy, you can make a further complaint to the Financial Ombudsman Service.

For more information about the Financial Ombudsman Service, see How to use an ombudsman.

Struggling to make payments

If you are struggling to pay your credit card bill, contact your card provider to discuss your problem as soon as you can. They might agree to let you pay a reduced amount for a while. Ask for interest to be frozen so that the debt doesn’t go up. It’s not a good idea to increase your credit limit at this stage, as this is likely to get you into more debt.

For more information about how to sort out your debts, in England, Wales and Northern Ireland see Help with debt. In Scotland see Help with debt.

If you have other debts or you’ve had a change in your circumstances which means you can’t pay, an adviser at a Citizens Advice Bureau can help you to sort out your problems. You might be able to claim benefits or get other help. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB.

Further help and information

On Adviceguide

For more information about how to deal with credit cards, see Credit cards.

You may also find the following Adviceguide information helpful:

The Money Advice Service

The Money Advice Service is a free, independent service. Their website (www.moneyadviceservice.org.uk) has lots of useful information about borrowing and managing your money.

Go to their website for more information about:

Credit reference agencies

Callcredit

www.callcredit.co.uk.

Equifax

www.equifax.co.uk.

Experian

www.experian.co.uk.

Financial Ombudsman Service (FOS)

www.financial-ombudsman.org.uk.

Shop safe online

www.shopsafeonline.org.uk.

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