Paying by PayPal on a Card: Does Section 75 Apply?

Paying a trader through PayPal with a credit card usually breaks the Section 75 link. Section 75 of the Consumer Credit Act 1974 makes your credit card provider jointly liable with the supplier when something goes wrong, but it depends on a direct chain between you, the lender and the trader. When PayPal sits in the middle, that chain is broken, and MoneyHelper's guidance is blunt: "Be careful when making a payment using your credit card via PayPal, as you often won't get Section 75 protection this w"¹.

That does not leave you with nothing. PayPal runs its own buyer protection scheme if an item is not delivered or not as described, and your card provider may still consider a chargeback claim¹. What changes is the nature of the right: Section 75 is a legal protection written into the Consumer Credit Act, while PayPal's scheme and chargeback are contractual and scheme rules that can be refused.

The value of the purchase still matters. Section 75 covers a single item costing between £100 and £30,000, even if you only pay part of that on the card¹. Below £100, or above £30,000, the legal right does not apply at all, whatever route the payment takes.

Paying through PayPal usually breaks the Section 75 link

Section 75 works by making the credit provider jointly liable with the supplier for a breach of contract or a misrepresentation. The legislation ties the right to a debtor-creditor-supplier arrangement, and the government's own review of the Consumer Credit Act accepted that "the current operation of Section 75 means that this protection might not apply when the supplier uses a third-party paym"⁵. PayPal is exactly that kind of intermediary.

Citizens Advice puts the consumer version plainly: "You can't usually use Section 75 if you didn't buy directly from the trader - for example, if you bought from eBay"⁶. The same logic catches marketplace sellers, voucher sites, wallets and travel agents. M&S Bank's own guidance says payments made through an agent or third party may not be covered, and that a cardholder should always try to make credit card payments directly to the supplier⁷.

The Consumer Council for Northern Ireland goes further on one payment route: if you use a bank transfer, "you lose all consumer rights under Section 75 of the Consumer Credit Act 1974 and under the Chargeback process"⁸. That is the sharpest version of the same principle. The further your money travels from your card to the trader, the weaker the protection.

What Section 75 covers on a credit card: £100 to £30,000

The core rule is simple. Section 75 applies to a single item costing between £100 and £30,000, and it does not matter that you only put part of the cost on the card¹. Citizens Advice states the same threshold: "If you paid any part of the cost by credit card, you can use Section 75 - as long as the total cost of the item is more than £100 and no more than £30,000"⁶. The Consumer Council for Northern Ireland frames it as paying by credit card for a single item between £100 and £30,000⁸.

The protection is not limited to the amount you charged. UK Finance, the trade body for the banking industry, explains that "If Section 75 applies, it doesn't matter that the transaction was only partly financed by credit and recovery is not lim"³. So a deposit paid on a credit card can bring the whole purchase inside the right, provided the total item value sits in the band.

There is a subtlety in the older legislation. The enacted text of section 75 disapplies the right where the supplier has attached a cash price "not exceeding £30 or more than £10,000"⁹. That figure reflects the original 1974 drafting and has been superseded in practice by the £100 to £30,000 range that regulators and consumer bodies now describe. Where the two figures differ, the current consumer guidance is the one to work from.

Where Section 75 does not apply

Several conditions remove the right entirely, and they are worth knowing before you assume you are covered.

• Debit and charge cards. "This does not apply to charge cards or debit cards"². Debit cards do offer chargeback protection on purchases, but not Section 75¹.
• Payments through an intermediary. Buying through a marketplace, wallet, voucher site or travel agent usually breaks the link⁶.
• Bank transfers. Using this option loses all consumer rights under Section 75 and under chargeback⁸.
• Non-commercial agreements. The legislation excludes claims under a non-commercial agreement⁹.
• Agreements secured on land. Section 75A does not apply to an agreement secured on land¹⁰.
• Regulated deferred payment credit agreements. Section 76 disapplies the section for these agreements¹¹.

There is also a separate rule in the wider Consumer Credit Act that disapplies certain provisions where a payment service is provided in relation to funds covered by a credit line under a regulated agreement¹². These are technical carve-outs, but they explain why a payment that looks like a card purchase can fall outside the protection.

Chargeback and PayPal's own cover when Section 75 fails

When Section 75 is unavailable, two other routes remain, and they behave differently.

Chargeback is a scheme operated by the card networks Visa, Mastercard and American Express¹³. Citizens Advice describes chargeback as the route to a refund where a payment was made with a debit card or charge card, or with a credit card or buy now, pay later and Section 75 is unavailable⁶. It is not a legal protection, unlike Section 75¹⁴. It also only covers the amount actually put on the card, so a deposit-only payment returns only the deposit³.

PayPal Buyer Protection covers non-delivery and items not as described. Where a seller took payment through PayPal and never sent the item, the buyer is covered, though there are exceptions and time limits on lodging a claim¹⁵. The scheme has real gaps. Where a scammer used fake PayPal payment pages, "As PayPal isn't part of the transaction, you won't be able to claim your money back via PayPal Buyer Protection"¹⁶. Sellers lose cover if they did not post to the account holder's registered address¹⁷. And paying a trader through friends and family rather than a goods and services payment "would remove any payment protection"¹⁸.

Which? has reported that PayPal cover can sometimes make a Section 75 or chargeback claim difficult, because the two schemes overlap and each side may point at the other¹⁹.

Paying directly or through PayPal: how the protection differs

The table below sets out what each route gives you. It describes the rules, not a recommendation.

The practical difference is who you chase and on what basis. With Section 75 you have a statutory claim against a regulated lender, and if the lender refuses you can take the dispute to the Financial Ombudsman Service. With PayPal Buyer Protection you are relying on PayPal's own terms, and with chargeback you are relying on your bank applying scheme rules.

What if I only paid the deposit on my credit card?

If Section 75 applies, the deposit rule is generous. UK Finance states that recovery is not limited to the deposit, so the full amount can be claimed even though only part of the transaction was financed by credit³. Danske Bank's card dispute guidance says the same: "You're covered for the full amount even if you only paid part of the payment by credit card (e.g. the deposit)"²⁰.

Chargeback does not work that way. It "only applies to the amount of the transaction made on the credit or debit card", so only the deposit would be returned³. That is a meaningful difference on a large purchase such as a holiday or building work, where the deposit may be a small fraction of the total.

The threshold test still applies to the whole item, not the deposit. If the total cost is more than £100 and no more than £30,000, and you paid any part by credit card directly to the trader, the right can be engaged⁶. If the payment went through PayPal, the third-party problem usually defeats it regardless of the deposit.

Does Section 75 now cover buy now, pay later purchases?

This area changed on 15 July 2026. For purchases made before that date, "you can't start a section 75 claim if you paid using buy now, pay later"⁴. For a single item costing between £100 and £30,000 bought on or after 15 July 2026 using a buy now, pay later provider, you are protected under Section 75, and the provider is jointly liable for faulty goods, non-delivery or the retailer going out of business²¹.

The FCA confirms the same principle for deferred payment credit agreements: Section 75 of the Consumer Credit Act is available, so you may be able to get a refund from the lender if something goes wrong with what you have bought²². StepChange's guidance on buy now, pay later says you have the same Section 75 protections that you have with a purchase on a credit card²³.

The date matters because it splits the treatment of older and newer agreements. A buy now, pay later purchase made before 15 July 2026 sits outside Section 75, and chargeback may be the only card-based route: you can ask for chargeback if you paid with a credit card or buy now, pay later agreement and cannot use Section 75, or with a debit or credit card through a buy now, pay later provider⁴.

How to make a claim and where to get help

The first step is to work out which right you are using, because the process differs.

1. Check the route and the amount. Confirm whether the payment went directly to the trader or through PayPal, and whether the item cost between £100 and £30,000¹.
2. Contact the trader first. A refund or replacement from the seller is usually the simplest outcome, and it avoids a dispute about which scheme applies.
3. Raise a Section 75 claim with the card provider if it applies. Halifax, for example, tells customers that "If you want to raise a Section 75 claim, you'll need to call us"²⁴. The FCA expects credit and debit card providers to handle section 75 and chargeback claims in a reasonable timescale and to explain any delays or declinature clearly²⁵.
4. Ask for chargeback if Section 75 is unavailable. Citizens Advice sets out the routes: debit or charge card, or credit card and buy now, pay later where Section 75 cannot be used⁶.
5. Use PayPal Buyer Protection for non-delivery or not as described. Note the exceptions and time limits¹⁵.
6. Escalate to the Financial Ombudsman Service if the firm will not resolve it. If you made a payment using PayPal or a finance agreement, you might be able to complain and get your money back through the ombudsman²⁶. If you are unhappy with a firm's response, you can take the matter further by referring it to the Financial Ombudsman Service²⁷.

The ombudsman service handles complaints about financial firms, including transactions, transfers between firms or share-dealing platforms or charges²⁸. It is free to use and its decisions are binding on the firm.

Free, impartial help is available from MoneyHelper and Citizens Advice if a claim is refused and you are unsure of your next step. If a purchase has left you struggling with card debt, StepChange and National Debtline offer free debt advice.