Credit Card Purchase Protection Explained

Photo to accompany story about credit card purchase protections. Twenty20

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You may know that sinking feeling: you buy a new item you’ve been after for a while — a new phone, say, or something fancy and expensive — and just a few days later, it breaks, or you drop it and it gets cracked. Or maybe it gets stolen. 

Your credit card might be able to help.

Having the right credit card is one of the most important assets in your financial toolbox. It can help you travel the world for little to no cost thanks to points, get you discounts on food delivery, and even help you take money off your online shopping purchases. And then several cards offer a benefit that’s often overlooked, but can be very useful: purchase protection.

Purchase protection can be invaluable in situations like the above, and help save you hundreds, if not thousands, of dollars on items whose cost you might not be able to recoup otherwise.

Let’s take a closer look at how it works.

What Is Purchase Protection?

Purchase protection is essentially a type of insurance that applies if something you bought breaks or is stolen. If you paid for an item with a qualifying credit card, you may be able to get reimbursed for it, even if the date to return the item has passed. In most cases, coverage lasts between 90 to 120 days from the date of purchase.

If your card has a purchase protection benefit, it’s automatically included — you do not need to register for it.

Purchase protection should not be confused with price protection, another perk offered by some credit cards. Price protection, which is relatively rare, protects you against price fluctuations on your purchase; your credit card issuer can reimburse you for any difference in price after you’ve purchased an item, if a lower price becomes available.

What Cards Come With Purchase Protection?

Purchase protection terms vary from card to card.

Some notable cards that offer purchase protection include the American Express® Gold Card; Chase Sapphire cards, both Reserve and Preferred; and the Blue Cash Everyday® Card from American Express, just to name some of the most popular.

American Express Gold Card

With the Gold card, coverage duration lasts 90 days from date of covered purchase. You are eligible to receive up to $10,000 per item, and maximum coverage is $50,000 per calendar year.

Chase Sapphire Preferred

Chase Sapphire Preferred cardholders are eligible to receive up to $500 per claim and $50,000 per account each year.

Chase Sapphire Reserve

Chase Sapphire Reserve cardholders are eligible to receive up to $10,000 per claim and $50,000 per year. With either card, coverage lasts 120 days from the day of purchase.

Blue Cash Everyday Card from American Express

If you have the Blue Cash Everyday® Card from American Express, you’re eligible to receive up to $1,000 per qualifying purchase and up to $50,000 per calendar year. Coverage duration is 90 days from the date of covered purchase.

These are just a few examples of popular cards on the market that offer purchase protection benefits. We recommend checking your card issuer’s policy to see what benefits and protections you may be eligible for.

How to Use Purchase Protection

In the event that your item is stolen or damaged, get in touch with your credit card issuer immediately. While you typically have a generous length of time to file a claim, it’s always better to start the process as soon as possible.

The claim itself can be filed online, and you will likely have to include in that case scanned or photographed copies of the relevant paperwork, as well as a description of the damage or of how the item was lost or stolen. The documents you need are the same for damaged or broken and for stolen items, except that in the latter case you will need to provide a police report as well.

Note that in most cases, it doesn’t matter how your item is damaged or stolen, but you should always make sure you have all appropriate documentation at the ready when you begin the claim process. Credit card coverage may also be secondary to any insurance policies you may have that would cover the damage or theft, such as homeowners insurance or auto insurance; in those cases, you would need to provide proof that you have submitted claims to those insurance providers.

The documents you will need typically include:

  • The claim form, which you can fill in online in most cases
  • Receipt showing proof of purchase
  • Your credit card statement showing you purchased the item with the card. If you do not have a paper statement, a screen capture from your online statement will do
  • If an item was damaged or broken, include pictures showing clearly the damage or breakage you described in the claim form
  • Insurance claim (if applicable)
  • Insurance declaration page (if applicable)
  • If your item was stolen, a police report
  • Your contact information

Depending on the issuer, you may receive a statement credit or a check if your claim is approved.

What Items Does Credit Card Purchase Protection Cover?

Not everything you buy with a credit card that has purchase protection is covered. There are a few exclusions to note across many cards, notably: one-of-a-kind antiques and artwork; jewelry and watches; custom-built items, and computer software. Check your specific card’s policy to see the full list, as specific categories can differ from card to card.

Bottom Line

Purchase protection is a valuable benefit offered by some credit cards that can help you recoup your expenses  in the event items you bought with the card are damaged or stolen within a certain timeframe. If you need to use purchase protection, be sure to file a claim within the coverage duration period.