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[25% down the page] Finally, always use a credit card to make major purchases - you can always pay off the balance immediately so it doesn't cost you any more. Bankers get a bad wrap these days, but if you buy with a credit card and something goes wrong it is the bank's money no[t] yours. They will refund you and chase whoever sold you the laptop for repayment.

I realise that this financial advice originates from PCAdvisor.co.uk, so I'm doubting the quality, especially seeing as the penultimate sentence contains a typo (ie no[t]). Are the last two sentences true? Are they referring to a credit card charge dispute?

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    "wrap" is also a typo! – mkennedy Dec 31 '14 at 23:58
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    Just because some advice doesn't come from a reliable source, doesn't make it necessarily wrong ;). Definitely use a credit card for as many purchases as possible, assuming you have the willpower to only purchase things you have money to repay. Don't forget to find a card that will give you money back, too! 1% is easy to find; the right cards will give you more than that on some categories, so find one (or multiple) that cover categories you frequently spend money on. – neminem Jan 1 '15 at 0:16
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    I agree with neminem's advice, although "assuming you have the willpower" is a big "if"! Personally I use my credit card as often as possible (which is basically everything, not just big purchases) but I would not recommend that to many, perhaps most, people I know. – jhocking Jan 1 '15 at 15:31
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Yes, they're referring to the credit card dispute (chargeback) process. In the case of dispute, credit card company will refund/freeze your charge so you don't have to pay until the dispute is resolved (or at all, if resolved in your favor).

If the dispute is resolved in your favor, your credit card company will charge back the merchant's service provider which in turn will charge back (if it can) the merchant itself.

So the one taking the most risk in this scenario is the merchant provider, this is why merchants that are high risk pay significantly higher fees or get dropped.

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The statement is (in laymans terms - if not in real terms) correct.

Most credit cards (I know this to be true for VISA and Mastercard) have dispute processes and will do a chargeback on the merchant - ie take the money back from the supplier in cases where you don't receive the goods or other fraud - Particularly if they can't produce a signature and (for transactions which are not face-to-face) a tracking number.

Your exact rights will vary by bank, but mostly they need to follow the guidelines set by the Credit Card company - and you do need to be a bit careful - if you received goods which were fake or a dispute arises you may be up for shipping the goods back to the merchant - and you have a limited - but reasonable time - in which to make the dispute.

(The statement "the money is the banks" is not technically true, there is no money involved until you pay it, only credit [ they are very different, but almost no-one knows that, I communicated with a Minister of Finance on the topic], but this is quite technical and as a layman not something you need to worry about here)

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  • Once a credit card transaction settles (posts to your account), money changes hands. Settlement files are generated and sent to banks, and some sort of payment file is used by the acquiring bank to determine how much each merchant should get for their net settled transactions. – Noah Jul 17 '15 at 17:04

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