British holidaymakers can feel better protected when they buy abroad following a ruling by the Court of Appeal.

The court has ruled that foreign credit card transactions are covered by Section 75 of the Consumer Credit Act which allows shoppers to claim against the card issuer if a purchase is unsatisfactory or faulty.

Section 75, which applies to goods between the value of £100 and £30,000, also gives cardholders the right to claim their money back from the retailer if a company goes out of business.

Welcoming the ruling, Which? spokesman Mike Naylor said: "It is great news for consumers that they are now officially covered wherever the card is used."

Although some lenders have already compensated customers on overseas purchases, others have refused saying it is too expensive to underwrite purchases in this way.