What is Credit Card Purchase Protection?

If you’re looking for one good reason to use a credit card instead of cash or a debit card, it has to be the Credit Card Purchase Protection. Few among us can say that we have never purchased something that was accidentally damaged or lost which meant we were essentially out of luck. Credit cards that provide purchase protection will pay the cost to repair or replace items damaged within 90 days of purchase. And the best part about that is the protection costs your nothing.

Not all credit cards offer it, so it may be also be a good reason to consider switching to one that does. Purchase protection is usually provided with the upper tier cards offered by Visa and MasterCard. Amex provides the protection on most of its cards, but its upper tier cards have greater protections. Within each family of credit cards, the benefits can vary widely among the individual cards. For instance, the amount of coverage per occurrence can range from $500 to $1,000. Also, the annual limit for coverage can range from $10,000 to $25,000. With some of the premium cards, these ranges can extend up to $10,000 per occurrence or $50,000 per year; however the annual fees will also be higher.

Credit Card Purchase Protection works very much like any insurance policy in which you file a claim for reimbursement in the event your property is damaged, lost or stolen. With purchases, it can be especially useful when ordering items on line and then never receiving them or receiving a damaged item. It’s your responsibility to contact the manufacturer or shipper to try and resolve the matter. If you don’t receive satisfaction you could then file a claim with your credit card company who will then take on the matter. In most cases, the card company will reimburse you fairly quickly while it continues its investigation into the matter.

Unquestionably, the coverage is well worth it especially since it costs you nothing. It may require that you apply for a new card from one of the issuers that offer it, and, unless you have very good credit, it’s not a sure thing that you will be able to obtain it. And, with many of the cards that do provide it, the annual fees could be much higher than your current cards, so you will need to weigh the extra costs to the potential benefit. If you are planning some major purchases, such as a flat screen TV or appliance, or maybe a new iPad, the annual fee could be considered the extra cost of insurance that could save you a lot of money when the unexpected happens with your new purchase.