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All About Credit Card Purchase Protection

Did you buy a new cell phone only to have it stolen a few weeks later? Did someone just spill coffee all over your brand new laptop? Well, your credit card may have you covered thanks to a benefit called purchase protection. This great feature can help you replace or receive reimbursement for stolen and damaged items. Let’s take a look at what purchase protection can (and can’t) cover.

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What Is Purchase Protection?

Purchase protection offers short-term theft and damage insurance for items you purchase with your credit card. It automatically covers all eligible purchases on your card, with no extra registration necessary. The catch is that not all credit cards offer purchase protection and not all items are eligible for coverage. The definition of an eligible purchase also varies from card to card. Purchase protection serves as a secondary insurance coverage. You can only use it if another insurance, like renters or homeowners insurance, doesn’t cover the item.

Purchase protection can go by different names like purchase assurance, purchase security or damage protection. Note that purchase protection is different from price protection and extended warranty protection. Price protection helps you get the lowest prices for the purchases you make. Extended warranty protection adds up to one year to an item’s original manufacturer’s warranty.

What Does Purchase Protection Cover?

Purchase protection covers many everyday purchases, but there are several exclusions. Additionally, not all credit cards cover the same things. You should read your credit card’s agreement papers and terms and conditions to find out exactly what it covers.

Generally, credit card purchase protection won’t include live animals or plants, antiques or collectibles, computer software, motor vehicles and their parts, medical equipment, perishable items, household items, gift cards, checks or tickets. Additionally, loss or damage in certain situations tend to fall under exclusion, too. This means items lost or stolen from a motor vehicle, items lost under the care of common carriers (airplanes, postal carriers, etc.) and used or pre-owned items.

Further, you will have to prove some sort of theft or wrongdoing to use purchase protection. If you simply misplaced an item, it won’t be covered. As an example, if you forgot your new watch on an airplane, you would need to file a police report to have a chance at reimbursement. Failure to take proper care of an item could also exclude you from coverage. Let’s say you momentarily left your laptop on a coffee shop table to take a phone call outside. If someone stole your laptop in that time, you probably won’t receive purchase protection benefits.

Items that you give as gifts are eligible as long as you purchased them with your credit card. This makes purchase protection a pretty useful benefit for your holiday shopping. Further, if you buy items with points from your rewards credit card, those purchases will also be covered.

How Much Does Purchase Protection Cover?

All About Credit Card Purchase Protection

Purchase protection will not reimburse you for more than what you originally paid for an item. At the same time, purchase protection only covers up to a certain amount. For example, Discover will not reimburse you for any more than $500 per claim and no more than $2,500 per year. That means if someone steals a $600 item from you, Discover won’t reimburse the full price. On the other hand, Visa could reimburse you for up to $10,000 per claim and up to $50,000 per year. Always make sure to call your credit card issuer if you are unsure about your protection limits.

How Long Does Purchase Protection Last?

There are two main time frames to keep track of. First, purchase protection only applies for a certain time after an item’s purchase date. The cap usually lands at 90 days, but the exact time frame will vary from card to card. It may also vary by state or country.

Second, you need to file a claim through your credit card within a certain amount of time of the incident occurring. This is usually 30 or 60 days. Additionally, if the item was stolen, you will have to file a police report usually within 48 hours after the incident occurs.

Does My Card Offer Purchase Protection?

Purchase protection is offered on many cards from all major credit card companies (i.e. Visa, MasterCard, American Express and Discover). Credit cards that require the cardholder to have good credit are more likely to offer purchase protection. Cards designed for people who are building credit or have poor credit are less likely to have this benefit.

To know if your exact card offers purchase protection, you should read your card’s guide to benefits. It will explain your card’s exact policy in detail. The guide to benefits is mailed to you when you first receive a card. If you never received it or no longer have it, you might find it online by searching for your card. Not all credit card providers post these guides online though so you may have to call the credit card’s customer service for information.

How to Use Purchase Protection

In order to use purchase protection, you need to file a claim through your credit card provider. If you have a Visa or a Discover card, you will need to call their customer service number to file your claim. MasterCard and American Express allow you to submit an online claim form or call their customer service number.

Don’t forget that purchase protection only applies within a small window after purchasing an item. Most cards offer protection for 90 days after the item’s purchase date, but this can vary by state and by country. In any case, you’re probably better off filing a claim as soon as possible.

When you file a purchase protection claim, you will need to provide more information than just the claim form. For starters, you’ll need all your credit card information handy when filing the claim. Next, you will need to produce an itemized receipt that clearly shows the date you purchased the item and its cost, plus the credit card statement that includes the item. Lastly, when reporting damaged items, you will need to provide a description of the damage plus how and when it occurred. When reporting stolen items, you need a copy of a police or incident report that was filed shortly after the theft.

For replacement or reimbursement, the credit card provider may require you to mail them the item. Some companies will have you ship the item at your own expense, while others can cover shipping and handling, so always keep your receipts.

Credit Card Purchase Protection
American Express Discover MasterCard* Visa
Cards Covered All American Express cards (see individual card benefits for details) All Discover cards Select MasterCard cards (see your card’s benefits for details) Select Visa Signature, Visa Business and Visa prepaid cards (see your card’s benefits for details)
Length of Coverage 90 days 90 days 90 days; some cards offer 120 days (90 days for New York residents) 90 days
Maximum Amount Covered $1,000 per occurrence**, $50,000 per cardmember account per calendar year; $500 per occurrence caused by natural disaster $500 per claim, $2,500 per year $10,000 per claim, $50,000 per cardholder account per 12 month period; Some cards offer a lower maximum $10,000 per claim, $50,000 per year; Less for Visa prepaid cards
How to File a Claim Call 1-800-322-1277 or visit the American Express Claims Center Call 1-800-347-0213 to file a claim Call 1-800-627-8372 or file a claim online Call 1-800-848-1943 or log in to Visa’s online Claims Center

*Called purchase assurance on some cards.
**$10,000 per occurrence for Platinum Card®, Delta Reserve®, Premier Rewards Gold, Gold Card, Ameriprise Gold and Fidelity Gold Card Members.

The Takeaway

All About Credit Card Purchase Protection

Purchase protection is a fantastic and complimentary benefit. At no extra cost, you gain access to short-term theft and damage insurance for items purchased with your credit card. Just keep in mind that not all your purchases or lost items can be fully covered. Make sure to read your credit card’s guide to benefits to see if an item is eligible. If you want to use purchase protection, remember to always save your receipts and to file a claim as quickly as possible.

Tips for Using Credit Card Purchase Protection

  • Filing a purchase protection claim doesn’t always guarantee approval. If you file a claim that is denied, try calling your credit card’s customer service number. You can ask them why your claim was denied or about the process in general. You might even have the chance to plead your case and change the decision. Just remember to always treat customer service representatives with respect. You only hurt your case if you’re rude to someone who is trying to help you.
  • Always keep your receipts. We’ve said it already, but it’s worth repeating. That way, you’ll be better-prepared to file for a benefit like purchase protection or price protection. Having your receipts also lets you double check your credit card statements. So in the case of a merchant making a mistake and overcharging you, you can more easily dispute it with a receipt in hand.
  • Don’t forget that it’s usually credit cards that require good credit that will offer purchase protection. If you don’t qualify for such a card but you really want purchase protection, never fear. There are a number of financial habits you can work on building to improve your credit score.

Photo credit: ©iStock.com/princigalli, ©iStock.com/maurusone, ©iStock.com/andresr

Derek Silva, CEPF® Derek Silva is determined to make personal finance accessible to everyone. He writes on a variety of personal finance topics for SmartAsset, serving as a retirement and credit card expert. Derek is a member of the Society of American Business Editors and Writers and a Certified Educator in Personal Finance® (CEPF®). He has a degree from the University of Massachusetts Amherst and has spent time as an English language teacher in the Portuguese autonomous region of the Azores. The message Derek hopes people take away from his writing is, “Don’t forget that money is just a tool to help you reach your goals and live the lifestyle you want.”
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