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Have you ever bought a new laptop, only to spill coffee all over it the following week? Maybe you’ve invested in a new refrigerator, only to have the ice maker break a day after the manufacturer’s warranty has expired. Or perhaps you’ve finally bought the television you’ve been dreaming of, only to see it for 25% cheaper a week later.
These annoyances can cost you a significant amount of money and stress. But actually, they don’t have to.
If you’re equipped with the right card, credit card purchase protections can save you in the worst moments. Specifically, they can save you thousands of dollars and give you peace of mind.
It’s important to understand the different purchase protections you can receive, as well as the fine print of their limitations and how these can vary between card issuers.
Let’s dive into the finer details of credit card purchase protections.
What Is Credit Card Purchase Protection?
So, what is credit card purchase protection?
Credit card purchase protections are benefits that credit card companies offer their customers to safeguard purchases charged on their credit cards.
While ‘purchase protection insurance’ is a specific card benefit, credit card purchase protections is a catch-all term that refers to a wide range of protections such as:
- Fraud protection
- Extended warranty coverage
- Price protection
- Purchase protection insurance
The financial level of coverage, duration of eligibility, the types of goods and the exact situations that are covered can depend on the card issuer. For this reason, it’s important to familiarize yourself with your credit card’s terms and conditions to see the exact limits of your coverage. In some cases, certain credit cards don’t even offer purchase protections.
Types of Credit Card Purchase Protections
Let’s take a look at the most common types of credit card purchase protections you’re likely to run into.
Fraud protection is a type of credit card theft protection benefit.
Under federal law, you aren’t liable to pay the costs of unauthorized transactions on your credit card, as long as you report the theft or loss of your card before any fraudulent transactions occur. If you report theft or loss after a transaction is made, the maximum you’ll be liable to pay is $50.1
However, credit card issuers reduce the amount you’re liable to pay to $0, through a policy known as zero liability protection.
Of course, each card issuer is free to set their own terms and conditions when it comes to zero liability protection, as it is a voluntary benefit offered. For instance, the policy may not apply to certain types of cards or to certain types of transactions, such as those made abroad. So be sure to check with your issuer for the specific limits of their policy.
If fraudulent transactions are made with your credit card, your first priority is to contact your card issuer via phone or online. The Federal Trade Commission also recommends sending a letter to your provider, including the time and date you realized your card went missing, when you reported it and your account number. It’s best to keep a copy of this letter in your records.
While waiting for a resolution, you should continue to monitor your account activity, credit card statements and immediately report any new fraudulent transactions made.
Some premium credit cards offer extended warranty coverage. This typically extends existing manufacturer warranties by between one and two years and to a certain dollar amount when you purchase something using your card.
This means that if your purchase is damaged, you’ll save money on repairs and replacements for a period of time longer than the manufacturer normally offers. As warranties usually come on significant purchases, this credit card benefit can end up saving you thousands of dollars. It also saves you money compared to paying upfront for an extended warranty when you buy the product.
Of course, if you purchase a product that doesn’t come with a warranty, using a card with extended warranty coverage won’t entitle you to create a warranty.
Typical items that are covered by extended warranty policies include appliances and certain electronic goods. Motorized products, such as cars and boats, are excluded from extended warranty policies across all card networks.
Depending on the card you have, not all manufacturer warranties may qualify for extended warranty coverage. For instance, products with warranties of three years or less may only be eligible for extended warranty coverage. Likewise, not all scenarios in which a product is damaged are covered. For example, if products exhibit normal wear and tear, are damaged because of acts of war or through modifications you made to the product, then you most likely won’t be covered by extended warranty protection.
Card networks, such as Visa, Mastercard and American Express, rather than card issuers set the rules when it comes to extended warranties. However, card issuers can then choose whether or not to offer extended warranty coverage on their cards.
Here’s a quick overview of the extended warranty coverage limits of major card networks:
|Extended Warranty Details
|$10,000 per claim
$50,000 per year
|Provides one year of additional warranty coverage on manufacturer warranties between one and five years
|$10,000 per claim
No yearly maximum claim value stated
|Doubles manufacturer warranties of 24 months or less
|$10,000 per claim
$50,000 per cardholder
|Provides one year of additional warranty coverage on manufacturer warranties of three years or less
To make a claim, you’ll need to have your receipt of purchase, evidence of the purchase on your credit card statement, evidence of the manufacturer’s warranty and details of the damage or malfunction. You can then contact your card issuer to process the claim.
Deciding to buy a product, only to find it cheaper in another store a week later can be frustrating. That’s where price protection comes in.
With price protection, your card issuer will refund you the difference of a price drop. The price drop has to occur within a certain time frame after the initial purchase, normally between 30 and 90 days. However, in most cases, the cheaper product doesn’t have to be sold by the same merchant you bought the original product from.
To file a claim, you’ll need your receipt of purchase, evidence of the purchase on your credit card statement, and evidence of the lower sales price.
Keep in mind that each card issuer has a maximum claim and maximum yearly claim amount. That means if you find your new refrigerator for $1,000 cheaper at another retailer, but your credit card has a maximum claim value of $250, you won’t receive a $1,000 refund. Instead, you’ll receive the maximum claim amount.
Given that there are yearly claim maximums, you may also want to plan your larger purchases strategically, spreading them across multiple credit cards with price protection, to avoid exceeding the yearly claim limit.
Likewise, for most card issuers, price protection applies only to the price of the product, excluding taxes and shipping costs.
Purchase Protection Insurance
Purchase protection insurance is a type of credit card buyer protection.
When you pay using your credit card, purchase protection insurance covers eligible damaged or stolen goods for a specified time frame after purchase.
This could save you a significant amount of money on damaged or stolen products within the eligible time frame.
You’re typically covered for around 90 to 120 days after purchasing an item. It’s best to check with your card issuer to see which items are covered, the duration of time within which you can make a claim and what situations are covered. Your card issuer will either reimburse you, pay for repairs or offer a replacement product.
The maximum claim value varies between card issuers and can be as low as $500 and as high as $10,000. The annual cumulative claim value is normally capped at around $50,000 for the majority of cards.
Here’s an overview of the maximum claim limits and claim windows for a handful of major credit card issuers:
|Maximum Claim Value
|Annual Maximum Benefit
|$1,000 to $10,000 (depending on the card)
|Capital One (Visa Signature cards only)
|$500 to $10,000 (depending on the card)
|U.S. Bank (Visa SIgnature cards only)
To file a claim, you’ll normally need evidence of the purchase on your credit card statement, receipt of purchase, and a police report if the product was stolen or a description of the damages if it was damaged. With these details, you can contact your card provider and file a claim.
How To Choose a Credit Card with Purchase Protection
As with choosing the best travel credit cards, there’s some strategy involved in selecting the best one when it comes to purchase protection.
Here’s a solid strategy to follow when looking for the best credit card purchase protection.
Research Different Credit Cards
When looking for travel credit cards with strong purchase protection, you should first begin by conducting some general research.
Consider your spending habits and travel goals when you compare credit cards. You want to find a card that will reward the categories you spend in most often. Likewise, you want to have a card that offers perks that you’ll actually use. By selecting a card based on these criteria, offsetting annual fees will become far easier, as you’ll be more likely to receive a return in rewards and perks that exceed the annual fee.
Once you’ve narrowed down your selection, now’s the time to turn your attention to the purchase protections offered by each card.
Read the Terms and Conditions
When comparing the purchase protections offered by each card, it’s crucial to carefully review the terms and conditions of each card and card issuer.
You’ll want to keep an eye out for the following:
- Maximum claim value. The maximum amount you can receive per claim and per year varies by card issuer. If you know you have specific purchases with significant dollar values coming up, it’s important to have a card that will have the best insurance for these purchases.
- Duration of coverage. It’s important to know the period in which you’re eligible to make a claim. For purchase protection, the duration of coverage is usually between 90 and 120 days after purchase. For extended warranty coverage, it typically extends the warranty by between one and two years. For price protection, you can typically make a claim 30 to 90 days after purchase.
- Exclusions. You’ll need to familiarize yourself with excluded products as well as excluded grounds for claims. As mentioned, motorized products such as boats and cars are excluded from extended warranty coverage across the board. Likewise, damage due to war, natural disasters, modifications to the product or natural wear and tear are usually insufficient grounds to file a claim.
You’ll also want to find out what the claims process involves. Specifically, you need to know who to contact as well as the specific documentation required for each type of claim.
Understanding these coverage limitations and procedures can help narrow your card selection down further.
Consider Additional Benefits
Once you’ve selected the best cards based on your spending habits, travel goals and the purchase protections offered, the last decision to factor in is what additional benefits are offered by the card.
In particular, many cards offer travel-related insurance benefits, in addition to purchase protections. These can include:
- Trip interruption/cancellation insurance
- Travel accident insurance
- Lost luggage reimbursement
- Auto rental collision damage waiver
For the frequent traveler, these insurances can save you money when booking vacations and rental cars. In some cases, they may provide sufficient coverage without the need for a separate insurance policy.
These additional benefits enhance the overall protection and insurance package you receive, increasing the return value on the card. In turn, this helps you to further offset any annual fees charged by the card issuer.
Best Credit Cards with Purchase Protection
Here’s a handful of some of the best cards that offer purchase protection.
Chase Sapphire Preferred® Card
The Chase Sapphire Preferred Card offers strong bonus spending category rates, in addition to robust travel redemptions.
The card earns:
- 5X points on travel purchased via Chase Ultimate Rewards® (excluding hotel purchases that qualify for the $50 annual hotel credit)
- 2X points on all other travel purchases
- 3X points on dining, including eligible takeout, delivery services and dining out
- 3X points on online grocery purchases (excluding Target, Walmart and wholesale clubs)
- 3X points on select streaming services
- 1X point on all other purchases
In terms of purchase protections, the Chase Sapphire Preferred offers the following:
- Purchase Protection. Covers new purchases against theft or damages for up to $500 per claim and $50,000 per year, for up to 120 days after making the purchase.
- Extended Warranty. Extends eligible U.S. manufacturer warranties of three years or less by up to one additional year.
The card also offers a wide range of travel protections, including trip cancellation/interruption insurance, baggage delay insurance, auto rental collision damage waiver, trip delay reimbursement, and travel and emergency assistance services.
Chase Ultimate Rewards can be transferred to a wide range of airline and hotel transfer partners at 1:1 ratios. If you redeem points for travel through Chase Ultimate Rewards, you’ll receive 25% more value. Likewise, every account anniversary year, you’ll receive a point boost equivalent to 10% of total purchases charged to your card.
The card is also free of foreign transaction fees, making it ideal for traveling abroad.
Ink Business Preferred® Credit Card
The Chase Ink Business Preferred card rewards you for a wide range of business purchase categories.
The card earns you 3X points on the first $150,000 spent (1X point thereafter) in combined purchases in the following categories:
- Shipping purchases
- Advertising purchases made through search engines and social media sites
- Phone services, cable and internet
Points can be redeemed for 25% more value on travel purchases made through Chase Ultimate Rewards. You can also issue employee cards free of charge, set spending limits, and enjoy the freedom of zero foreign transaction fees while abroad.
The Ink Business Preferred card offers the following purchase protections:
- Purchase protection. Covers new purchases for up to $10,000 per claim and $50,000 per year, for up to 120 days after purchasing.
- Extended warranty. Extends eligible U.S. manufacturer warranties of three years or less by up to one additional year.
- Cell phone protection. Receive up to $1,000 per claim for damages or theft for you and your employees listed on your monthly phone bill. Maximum claim limit of three per year, with a deductible of $100 per claim.
The card also offers a range of travel protections including trip cancellation/interruption insurance, roadside dispatch and auto rental collision damage waiver.
For an annual fee of $95, the card comes with significant value and protection.
The card earns:
- 4X points on restaurants worldwide, as well as on takeout and delivery in the U.S.
- 4X points on groceries at U.S. supermarkets on up to $25,000 in purchases per year (1X point thereafter)
- 3X points on flights booked through amextravel.com or directly through the airline
- 1X point on all other eligible purchases
In addition to this, the card comes with a range of perks, such as:
- Up to $120 dining credit, given in $10 monthly statement credits, at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar, and select Shake Shack locations (enrollment required)
- Up to $120 Uber cash credit, given in $10 monthly credits to your Uber account, for Uber rides and Uber Eats orders in the U.S. when you pay with your card (enrollment required)
- Book a minimum two-night stay with the Hotel Collection through American Express Travel and receive a $100 experience credit at participating properties (subject to availability)
- Zero foreign transaction fees
The card offers the following purchase protections:
- Purchase protection. Covers new purchases up to $10,000 per claim and $50,000 per year, up to 90 days after the purchase was made.2
- Extended warranty. Extends U.S. manufacturers’ original warranties of up to five years or less by an additional one year, up to $10,000 per covered purchase and $50,000 per eligible card.3
It also offers car rental loss and damage insurance4 as well as a baggage insurance plan5 for traveling.
Travel with Peace of Mind and Purchase Protection
As already mentioned, certain credit cards come with a range of travel-related insurance. Let’s have a quick run through these insurances in more detail.
Trip Cancellation/Interruption insurance does as the name suggests. If your trip is canceled or interrupted due to unexpected reasons out of your control, you can be reimbursed for non-refundable costs up to a specific dollar amount, when they were charged to your card.
For example, if your flight is canceled, if you require medical evacuation or if adverse weather conditions disrupt your travel plans, you could be eligible for reimbursement.
Depending on the card issuer, you can typically receive between $2,000 to $10,000 back per claim. Some card issuers will reimburse you for a variety of costs as well as reasons, while others may only reimburse flight costs. Some also cover all the members on your travel booking while others may cover the primary cardholder only.
Lost luggage reimbursement covers you for lost, damaged or delayed baggage. Coverage limits can be anywhere from $100 per day for a specified maximum number of days, to up to $3,000 per person for both lost or damaged carry-on and checked bags.
An Auto Rental Collision Damage Waiver can cover you for damages to a rental car. This is normally offered as secondary coverage, meaning it will kick in only after your primary coverage has been paid. However, in some cases, this type of coverage can reimburse you for auto insurance deductibles, saving you a significant amount of money. Auto Rental Collision Damage Waivers tend not to cover liability.
Likewise, if you want theft to be covered, you’d need a credit card that offers a Loss Damage Waiver.
In all cases, it’s key to check the terms and conditions of your card issuer to understand the coverage limitations and exclusions.
If you want a card that gives a comprehensive insurance benefits package, check out the best credit cards with travel insurance.
Maximizing Your Savings: The Power of Credit Card Purchase Protections
When considering the value of a credit card, purchase protections are often overlooked. However, purchase protections can save you thousands of dollars, enabling you to offset the cost of annual fees far quicker.
With the right credit card, you no longer need to purchase extended warranties from the cashier, nor do you need to worry about getting the best price deal. In both situations, you’ll be covered.
Just be certain that you understand the terms and conditions of your card’s purchase protection.
If you’re ready to start insuring your purchases and saving yourself potentially thousands of dollars, take a look at the best cards for purchase protection as suggested above.
1 Information collected from the Federal Trade Commission (https://consumer.ftc.gov/articles/lost-or-stolen-credit-atm-debit-cards).
2 Purchase Protection is an embedded benefit of your Card Membership and requires no enrollment. It can help protect Covered Purchases made on your Eligible Card when they’re accidentally damaged, stolen, or lost, for up to 90 days from the Covered Purchase date. The coverage is limited up to $10,000 per occurrence, up to $50,000 per Card Member account per calendar year. Coverage Limits Apply. Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.
3 When an American Express® Card Member charges a Covered Purchase to an Eligible Card, Extended Warranty§ can provide up to one extra year added to the Original Manufacturer’s Warranty. Apple store warranties of five (5) years or less. Coverage is up to the actual amount charged to your Card for the item up to a maximum of $10,000; not to exceed $50,000 per Card Member account per calendar year. Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.
4 Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel-Related Services Company, Inc.
5 Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.
New to the world of points and miles? The Chase Sapphire Preferred® Card is the best card to start with.
With a bonus of 60,000 Chase Ultimate Rewards® Points after you spend $4,000 on purchases in the first 3 months of account opening. , 5x points on travel booked through the Chase Travel Portal and 3x points on restaurants, streaming services, and online groceries (excluding Target, Walmart, and wholesale clubs), this card truly cannot be beat for getting started!
Editors Note: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.