Many credit cards include a purchase protection plan. These plans allow you to receive reimbursements or replacements for items you buy with the credit card that may break or malfunction in the months after you make a purchase. Purchase protection generally protects items damaged or stolen. While these programs can be immensely helpful and provide great assurance when you buy, they also have major limitations you may want to understand before applying for a card advertising the benefit.
What Is Credit Card Purchase Protection?
Purchase protection benefits provide replacement or repair for eligible damaged, lost or stolen items purchased using a credit card. Usually, the benefit requires the purchase be made within the last 60 to 120 days and may require documentation of both the purchase and damage or theft.
Terms vary by card and some issuers may not offer a full reimbursement for purchase protection claims; they may instead opt to cover the cost of repair for damaged items.
Purchase protection programs include additional limitations on the types of purchases eligible to receive coverage and exclusions of the causes of loss, damage or theft of an item. Read your card issuer’s terms and conditions carefully before deciding if the benefit will be of use to you.
How Does Purchase Protection Work?
Purchase protection offers secondary coverage, meaning it applies only after all additional coverage has been exhausted. Primary forms of coverage include renters insurance, homeowners insurance, car insurance and other reimbursements the vendor has available. This means your purchase protection works only after you’ve exhausted most other forms of insurance or coverage that could apply to the item.
How To Use Credit Card Purchase Protection
Terms vary depending on your card and the card’s issuer. It’s important to understand your card’s approval process for purchase protection claims. You will likely be required to file a claim within a certain period of time following the loss with your card program’s benefits administrator. You will also likely be required to provide some form of proof that the loss actually occurred. What qualifies as proof is likely to vary somewhat from program to program.
When providing proof of loss, you will more-than-likely need to provide some, if not all, of these items:
- The original purchase receipt for the item.
- The credit card billing statement that included the purchase.
- Insurance declaration forms of other insurance policies you have that may apply to or cover the loss.
- A photo or repair estimate by an authorized repair facility documenting how much the damage is worth and that it did, in fact occur.
- A police report (for stolen or vandalized items).
In some cases, you will be required to mail in the damaged item to the program. Once the claim is filed, the benefit administrator will disburse payment depending on the terms of your specific card benefits agreement.
Common Purchase Protection Limitations
Purchase protection programs maintain limitations on the types of purchases covered. Some examples of purchases typically not protected are perishable items; motorized vehicles; one-of-a-kind, antique or items previously owned; and traveler’s checks, tickets, rare stamps or coins.
Common Purchase Protection Exclusions
Purchase protection programs include exclusions for certain causes of loss, damage or theft of an item. Some examples of these exclusions are acts of war; fraud, illegal activity or abuse done by the cardholder; lack of diligence in keeping the item safe; and theft from baggage not carried by hand.
Cards That Offer Purchase Protection
- American Express® Gold Card¹
- Ink Business Cash® Credit Card
- Blue Cash Everyday® Card from American Express¹
- Chase Freedom Flex℠*
- Capital One Venture X Rewards Credit Card²
- The Platinum Card® from American Express¹
- Chase Sapphire Reserve®
- Chase Sapphire Preferred® Card
- Chase Freedom Unlimited®
Bottom Line
Purchase protection benefits included with your credit card can save you money and hassle on damaged or lost items by providing reimbursement or repair, but terms vary by card and benefits program. Not all purchases or causes of loss are eligible for coverage, so be sure to read the fine print before you rest easy believing a purchase is covered.
¹Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.
²For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
