Can Your Credit Card Protect You From A Volcano?

I don't mean in a 'Dante's Peak' lava flow, lake of acid way but in the way that

matters to millions of Europeans whose travel plans have been upset by the recent cloud of ash.

Let's just say the Icelandic volcano won't be the last thing to spew fire as frustrated holidaymakers seek recompense for their cancelled flights and subsequent hotel expenses.

There are two issues: fees levied on consumers forced to use a card abroad and getting money back from cancelled flights.

The first issue will be down to whether users have suitable use abroad credit cards.

That will only become in time but it does underline the importance of this product.

For the second point the consumers' first port of call will be the major insurers. However, they have not yet revelaed whether they will produce the cash to cover the costs incurred because of the volcano since it's an "exceptional circumstance" or "act of God" claim.

Section 75 of the Consumer Credit Act means that where a company breaks its contract to provide a good or service worth 100 or more, the card company will make a refund.

Credit card companies will be called upon to reimburse their customers under this act if consumers' are able to show that their airline is in breach of contract and does not provide them with the flight purchased.

However, if the airline's terms and conditions say it does not have to in "exceptional" or "Act of God" circumstances, it is not in breach of contract. In such circumstances the credit card company does not have to pay out, according to the UK Cards Association, which represents the credit card industry.

Even if you've been caught out by the wording of terms and conditions that mean that an airline has not breached its contract, some card companies are still making refunds through a charge-back for a service not received.

Visa Debit Chargeback is a procedure in which the banks will "charge back" the value of the original transaction directly from the supplier's bank, and pass this amount on to the consumer.

Those wishing to try and claim should contact the bank who provided them with their Visa debit card within 120 days, requesting that they initiate the chargeback process.

Unfortunately, this will not apply to those who booked Ryanair flights with a prepaid MasterCard to avoid their credit card booking charges.

Those consumers wishing to claim for extra hotel expenses that they bought with a credit card may be covered by "'consequential cover" under section 75 of the Consumer Credit Act.

Although purchases on a Visa debit card which is attached to an account in overdraft are usually covered under the Consumer Credit Act, such purchases do not include 'consequential cover',

According to the UK Cards Association, purchases made on a Visa debit card do not include "consequential cover".

MasterCard credit cards - such as the popular Virgin Money credit card - and Mastercard debit cards meanwhile are not covered under the Act in any circumstance.

by: Justin Schamotta

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