Why having a second cardholder on your credit card account is not a good idea

Posted in 'Personal Finance' by Richard Catlin

18 September 2009

Very few people realise that the spending on a credit card by a second cardholder is not protected by Section 75 of the Consumer Credit Act 1974. This means that when something goes wrong - for example a holiday is booked and the travel firm fails, or where goods or services fail to materialise – there is a vast difference in your ability to get your money back depending on which one of you has used the card.

If the primary cardholder used the card, there’s absolutely no doubt. If the amount involved is between £100 and £30,000, you’re covered.

But if the secondary card was used, you’re not covered.

It can be argued that if the item has been purchased for the primary cardholder’s benefit, then the protection of Section 75 should apply, but this is by no means a clear cut area and is one open to appeal, interpretation and the generosity and discretion of your card company.

For this reason, we advise all checkmyfile customers to encourage secondary cardholders to obtain cards in their own name, and from then on, only to use those cards. You can ask your card company to stop issuing secondary cards on your account, or one of the easiest ways is simply to cut up secondary cards on receipt when they are renewed.

Very often, you’ll find that your ‘new’ cards are cheaper than your old cards, as most of us tend to carry credit cards that were issued when our credit standing was a lot weaker than it is now.

Make sure you get the full protection of the law by using separate cards – you can find credit cards matched to your credit rating on a very accurate basis by checking your credit report, or a little less accurately by using our free credit score service.