Money: Shoppers get a plastic promise

With credit card spending set to soar in the run-up to Christ- mas, one card issuer is offering shoppers a guarantee against paying over-the-odds on big presents. The guarantee is similar to those from shops which offer to refund the difference if you find a purchase cheaper elsewhere. It is being offered to existing and new holders of Royal Bank of Scotland's Au card.

The Au card's "price protection", part of an optional insurance package on the card that costs pounds 35 a year, means that if a shopper finds a purchase at a lower price within two months of buying, the card's insurer will refund the price difference. Claims are only eligible if there is a price difference of at least pounds 20, so in practice the cover is only likely to work for expensive purchases that are reduced. But the 60-day deadline does mean that Christmas shoppers might also be able to take advantage of price reductions in the January sales.

"When the designer dress worn at the Christmas party appears in the January sale at half price, card holders will be able to claim back the difference," states RBS's promotional literature.

The offer comes as cardholders are expected to spend a record pounds 10bn with plastic this Christmas. Most cardholders who take care should be able postpone payment for Christmas shopping until after the festive season and, assuming they can then afford to pay off the total bill, not pay a single penny in interest. Tim Lewis, marketing director at RBS Advanta, a card issuer, says: "If you buy something now it is more than likely you won't need to pay for it until after Christmas."

Cards nowadays will give interest-free periods of up to eight weeks between a transaction reaching the card company and you having to pay for it. Even if your shopping does appear on a card bill before Christmas, you could have as long as 25 days from when the statement was issued to pay.

RBS's Au card is rated among the "best buys" in this month's Which? magazine for people who pay off bills in full as well as those who borrow. This reflects its combination of no annual fee, a low interest rate of 13.9 per cent and 56 days' interest-free period rather than its novel insurance, although its price protection offer is thought to be a first from a major UK card issuer.

As well as the 60-day price protection on card purchases, the card's Buyers Advantage insurance package includes a free one-year extension to manufacturer's warranties on goods such as CD players and computers bought using the card, as well as 90 days' "purchase protection" for goods accidentally damaged, stolen, or destroyed by fire.

Other credit cards may offer purchase protection, or indeed "payment protection insurance", which is designed to meet payments if cardholders fall sick, have an accident or lose their jobs. Often the former will be free but the latter can be expensive. Likewise, only shoppers buying big ticket items and prepared to check up on subsequent price moves really stand to benefit from the Au card's insurance, which at pounds 35 is not cheap.

But whether or not the card seems good value, it is worth consumers knowing their rights as shoppers. There is nothing special about Christmas - your consumer rights are the same, although if anything does need to be returned some shops may insist that this is by the purchaser. Regardless of any separate guarantees and warranties, if goods you buy turn out to be faulty you are legally entitled to a full refund. And if you pay by any credit card and the item costs more than pounds 100 you can claim your refund from the card company, although most card issuers will insist you pursue the retailer first. Nor do you necessarily need a receipt - any proof of purchase should be adequate.

But if, rather than something being faulty, you just don't want a present, legally you have no rights, even to an exchange or credit note, let alone a refund. You are entirely dependent on the goodwill of the shop.

For details of the RBS Au card or its Buyers Advantage insurance, call 0800 000197. 'The Buyers Guide' is a free booklet produced by the Office of Fair Trading that covers buyers' rights. Call 0181-957 5058.