How Credit Card Purchase Protection Saves You Money

Hopefully there was purchase protection insurance for this!

Have you ever bought something new, only to accidentally damage it shortly thereafter? Of course you have, it happens to the best of us!

If your new purchase is accidentally damaged, stolen, or lost, you would be out of luck if you paid for it using cash or a debit card. However with credit card purchase protection, your eligible purchase would have been covered!

How does the purchase protection insurance work?
Not all cards have it… the ones that do are often mid-tier to upper-tier credit cards like American Express, Visa Signature, etc.  Purchase protection credit card coverage varies by issuer.
Consult your card issuer to see if you have coverage and how it works, but it typically is something along these lines if it comes on your card…

  • If your eligible purchase is accidentally damaged within 90 days or purchase, the credit card company will pay to repair the damage, replace the item altogether, or reimburse you for the cost of the item (the best option depends on the circumstances of course). Please note that Visa’s program has the most restrictions when it comes to accidental damage, as they only cover “damage due to fire, vandalism, accidentally discharged water, or certain weather conditions.”
  • If your eligible purchase is stolen (or lost, which is a part of some credit card protection plans) within 90 days or purchase, the issuer will reimburse you for the amount.

Are their limits on coverage?
Naturally, there has to be limits in place. Please note the limits vary by each individual card and what’s mentioned below can change at any time (so please check and confirm with issuer) but here’s a summary of what they were at the time of writing:

  • With American Express, the purchase protection limits vary by card. On most AmEx cards the coverage is up to $1,000 per occurrence, with a maximum of $10,000 per year in benefits. The Platinum charge card and Delta Reserve offer higher coverage at $10,000 per occurrence with up to $50,000 in annual claims, however those two cards both carry a $450 annual fee.
  • With Visa Signature cards the limit is up to $500 per claim and $50,000 per cardholder.
  • With MasterCard, some Platinum and World versions include “Purchase Assurance” coverage. The limit is $1,000 per occurrence, $25,000 max per year. Meanwhile some other MasterCards which offer “Buyers Security” that gives $500 coverage per occurrence and $50,000 per cardmember, per year.

Does this benefit cost extra?
The best part is this benefit is included for no additional costs on most cards that offer it.

What are the best credit cards with purchase protection?
Here are CreditCardForum’s sponsored picks for 2013:

American Express Blue – This is one of their most popular cards. The rewards and benefits are extraordinary.

Chase Sapphire – This credit card also offers an immense array of benefits including purchase protection.

This article was last updated November 15, 2013

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

I had to make a claim to AmEx when I dropped my 5 day old computer off of my kitchen table. They were excellent in helping me with the issue and when they received my broken product in the mail they refunded the full amount. Thank goodness for AmEx!

I tried submitting a claim for a computer that fell off a table 2 days after i bought it with a chase mastercard…denied. They said computers are not covered. Their website’s advertising material for the credit card says electronics are covered. Scam

I am fully aware of this benefit as an employee of American Express. I know that AMEX often has these claims and know first hand that we stand by them. I can’t speak for other companies but don’t think that there is any harm submitting a claim if needed.

Completely agree with Julie…

The terms and conditions are not online nor are they in the Benefits handbook. The customer service people do not have access to them.

And they explicitly deny all claims that are dobe when the items are on sale and the discount is implemented using a store gift card.

Complete scam

This concept of credit card purchase protection is a scam and false advertising promoted by the credit card companies. Just try to make a valid claim. Please do not continue to advertise this for these companies.

Been there, done that, claim was accepted. Now this was just a pair of earphones that cost ~$15, and this was AmEx- in other words, cream of the crop when it comes to customer support. My Citi Visa claims to have this benefit but takes far more work than AmEx to deal with (similar pair of earphones- AmEx accepted my claim over the phone and approved it with zero documentation needed while Citi asked for original receipt and repair estimate or to send in the item. Where am I going to get a repair estimate for a pair of earphones? And postage would be most of the cost of the earphones, which they said they wouldn’t reimburse if I chose to go that route. Gave up in the end; AmEx will get more of my business in the future.)

You bet it is, I just had my vehicle broken into and purchases either damaged or stolen.
One way or another VISA Signature Card Insurance Company (Insurance Company…that sleazy phrase) finds a way to deny everything. They don’t call themselves by that sleazy name “Insurance Company”, they call themselves the “Benefits Administrator”. If you actually read what’s covered, the exclusions, what is not covered, then exclusions…nothing can ever be paid for.