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What is purchase protection?
Safeguard your finances with this complimentary insurance.
Purchase protection provides you with extra value and greater peace of mind when you choose to pay with plastic. It’s a common complimentary credit card perk, especially for black, platinum and gold cards.
What is purchase protection?
Purchase protection is a service provided by a credit card company that safeguards any eligible purchase made with a credit card against theft, loss or accidental damage for up to three months generally. The terms and conditions for purchase protection vary between cards and affect what purchases are eligible, how long the insurance period is and what the claim limits are.
How does purchase protection work?
Taking advantage of purchase protection is relatively simple – if you purchased an eligible item with your credit card, you can file a claim for compensation if it’s damaged or lost under the terms of your issuer’s protection plan. However, if you have primary insurance that covers the item in question, you’ll need to make a claim there first.
Most retail purchases will generally be covered, but you should carefully read the terms and conditions to find out exactly what applies. Perishables or consumables are typically excluded. Motor vehicles and vehicle parts could also be excluded.
Bear in mind that the exact details and requirements of your purchase protection plan can vary between each network. Here’s a quick breakdown of each network’s plan, though you’ll want to read your guide to benefits for more details.
| Mastercard | Visa | American Express | |
|---|---|---|---|
| Length | 120 days, or 90 days for New York residents | 90 days | 90 days |
| Coverage | $1,000 per claim. $50,000 in total per cardholder | $500 per claim. $50,000 in total per cardholder | $1,000 per claim. $50,000 each year |
| Types of damage covered | Theft and damage | Theft and damage | Theft and damage |
| Eligible cards | Eligible World and World Elite credit cards | Eligible Visa Signature credit cards | All cards |
How do I make a claim for credit card purchase protection insurance?
The claims process differs depending on your credit card provider and the insurance company, but generally involves the following steps:
- Contact the insurance company. Depending on your insurer and policy, you may have to file your claim within a certain time frame — so don’t wait long.
- Provide details of the claim. You have to show that the item was purchased using your credit card within the eligible period of coverage.
- Submit any supporting documentation. Apart from original receipts, you may also need to provide other relevant documents such as police or incident reports.
- Wait for a response. Your claim will usually take up to 14 business days to be assessed, after which you will be notified of the result and reimbursed if successful.
Other types of complimentary credit card purchase insurance
Some credit cards may also provide the following complimentary insurance covers for your purchases:
- Extended warranty cover. This extends the warranty cover for items purchased using your card, meaning that you can enjoy extended warranty protection beyond the manufacturer’s warranty period.
- Price guarantee. This offers price protection so you claim the price difference for an item purchased on your card if you find it in another store nearby at a lower price within a certain period of time.
- Refund protection insurance. Refund protection ensures that you can still get a refund on items purchased using your card even if the merchant refuses to process a refund.
How to compare credit cards with purchase protection insurance
When considering purchase protection insurance, you should keep in mind that purchase protection policies are generally similar across all eligible cards from a network. As such, you’ll want to look at other factors to make your decision, such as:
- Annual fee. Complimentary extras such as purchase protection are likely to come with a higher annual fee than a no-frills card. This may outweigh the benefits of complimentary extras if you rarely or never use them.
- Purchase rate. When considering any credit card, interest rates are very important, especially if you are someone who carries a card balance. You may find that cards with complimentary freebies often charge higher rates.
- Rewards. If earning rewards with your card is important to you, you should consider factors such as the points and rewards program.
- Cash advance rate and fee. If you withdraw money using your credit card or use your card for cash equivalent transactions, including gift or shopping vouchers, you may be charged extra fees.
Our pick for credit card purchase protection
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Are you looking for a great card to put in your wallet that will give you peace of mind with every swipe? Check out these cards to find the one that best suits your needs.
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Bottom line
Unlike travel-specific perks such as airport lounge access and complimentary travel insurance, you can enjoy your purchase protection insurance on a day-to-day basis. When deciding if it’s something you actually need, it’s important to consider the costs of the card and whether this feature will be worth it in the long term. Compare credit cards to find one that best suits your purchasing needs.
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