The Consumer Credit Act 1974 (CCA) is the main law that regulates borrowing and lending in the UK. It protects consumers when they use credit — such as credit cards, personal loans, hire purchase, and some store finance agreements.

While the Consumer Rights Act 2015 focuses on whether goods, services, or digital content are faulty or not as described, the Consumer Credit Act focuses on how credit agreements work and what happens if something goes wrong with the finance.

This guide explains the Act in clear, simple terms.

What does the Consumer Credit Act cover?

The Act applies to most consumer credit agreements between an individual and a business lender. This includes:

  • Credit cards.
  • Personal loans.
  • Hire purchase agreements.
  • Car finance agreements.
  • Store finance and “buy now, pay later” (in many cases).
  • Catalogue credit.

It generally applies where the credit is provided to an individual for personal (not business) use.

Key protections under the Act

1. Written agreements and clear information

Lenders must provide clear written agreements that set out:

  • The amount borrowed.
  • The interest rate (APR).
  • The total amount repayable.
  • Repayment terms.
  • Default charges.

If a lender fails to follow strict agreement rules, the debt may become unenforceable without a court order.

2. Cooling-off period

For many credit agreements, you have 14 days to withdraw from the agreement. You must repay the amount borrowed plus any interest accrued, but you can cancel the credit itself.

3. Early settlement rights

You can usually repay the loan early and are entitled to a reduction in interest and charges.

4. Protection from unfair relationships

If the credit relationship is unfair — for example, because of excessive interest, hidden charges, or oppressive behaviour — a court can intervene and change the agreement.

5. Section 75 protection

One of the most powerful protections under the Act is Section 75.

If you pay for goods or services costing between £100 and £30,000 using a credit card, the credit card company is jointly liable if the supplier breaches contract or misrepresents the goods or services.

This means you can claim from the credit card provider instead of (or as well as) the retailer.

You can read more in our dedicated guide: What Is Section 75?

How it works with the Consumer Rights Act 2015

If goods are faulty under the Consumer Rights Act, you normally claim against the retailer.

However, if you paid by credit card and the purchase falls within Section 75 rules, you may also have a claim against the lender.

This creates two layers of protection:

  • Product/service rights under the Consumer Rights Act
  • Finance protection under the Consumer Credit Act

For a full comparison, see: Consumer Rights Act 2015 vs Consumer Credit Act 1974

And for how both laws interact in real disputes, see: How Section 75 and the Consumer Rights Act Interact

What to do if there is a problem with a credit agreement

Step 1 – Complain to the lender

Put your complaint in writing. Clearly explain:

  • What has gone wrong.
  • Why you believe the agreement breaches the Act.
  • What outcome you want.

Step 2 – Escalate to the Financial Ombudsman Service (FOS)

If the lender rejects your complaint or does not respond within 8 weeks, you can complain to the Financial Ombudsman Service. This is free and independent.

Official guidance:
Consumer Credit Act 1974 – legislation.gov.uk

Step 3 – Consider court action

If necessary, you may bring a claim in court. Courts have wide powers under the Act to:

  • Declare agreements unenforceable.
  • Reduce or remove interest.
  • Order refunds.
  • Change unfair terms.

Important limits to know

  • Section 75 only applies to credit cards — not debit cards.
  • The purchase must be between £100 and £30,000.
  • There must be a direct relationship between debtor, creditor, and supplier.
  • Different rules apply to hire purchase and conditional sale agreements.

If you paid by debit card instead, you may need to rely on Chargeback, which is a voluntary scheme rather than a statutory right.

In summary

The Consumer Credit Act 1974 protects you when you borrow money or buy goods using credit. It regulates how credit agreements are formed, what lenders must disclose, and what remedies are available if something goes wrong.

When combined with the Consumer Rights Act 2015, it provides powerful protection for consumers — especially where credit cards are involved.