Credit card companies have been dealt a financial blow after the Court of Appeal ruled that credit-card guarantees for goods and services also cover purchases abroad, as well as at home.


The decision, which overturned a previous High Court ruling, backs an appeal by the Office of Fair Trading and will be welcomed by shoppers who go online.


The latest ruling follows a test case in which the High Court ruled that guarantees didn't extend outside the UK.


Most card companies pick up the tab for unsatisfactory purchases made in the UK if they are between £100 and £30,000. However, these firms stood to save millions by not being liable on purchases made overseas.


Despite the victory for the OFT, the fat lady may be merely clearing her throat rather than getting ready to sing as LloydsTSB - one of three firms which sought the original ruling - considers appealing to the House of Lords. It argues that the latest ruling would, in theory, allow an individual to purchase abroad for £30,000 put just £1 on his/her card and then leave the firm open to substantial claims.

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