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Guide to Understanding Credit Card Purchase Protection

Guide to Understanding Credit Card Purchase Protection
Jason Steele
Jason SteeleUpdated November 8, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Many credit cards come with purchase protection, which offers coverage in the event that an item you buy with your card ends up getting damaged or stolen. This can come as a big relief if you make a major purchase and something goes awry a month or so later. You may be able to get the item replaced or repaired, or get your money back.However, not all cards offer purchase protection and those that do typically have coverage limits. Here’s a closer look at how credit card purchase protection works, including how to know if your credit card offers it, what’s included (and what’s not), and how to make a purchase protection claim.

What Is Credit Card Purchase Protection?

Purchase protection, also known as "purchase assurance" and "purchase security,”  is a benefit offered by many credit cards. This protection enables you to get a refund or replacement if an item purchased with your card is damaged or stolen within a specified time after the date of purchase, typically 90 to 120 days. Not all purchases are covered and there are typically limits on how much you can claim per item and per account, such as $500 or $1,000 per claim, and $50,000 per account, per year.

How Does Credit Card Purchase Protection Work?

Once you pay for an item with your credit card, the item is automatically eligible for coverage provided it’s not listed as an excluded item in your card’s benefits guide. If the item is damaged or stolen while your purchase protection coverage is still in force, you are typically instructed to file a claim by calling into a claims hotline or filling out a claims form online.For example, let’s say you buy a watch and it suddenly stops working two months later. You bring it back to the store to get it refunded or replaced, but that doesn’t work. If the credit card you used to buy the watch has purchase protection, you may be able to file a claim with your credit card to get the watch repaired or replaced, or get a refund of the purchase price.If you drop the watch and it gets damaged, or it ends up getting stolen, the same coverage would apply. Just keep in mind that the major credit card networks generally require a police report to be filed in the instance of theft. You would then provide this supporting documentation along with your claims form.With most purchase protection plans, the decision of whether a covered item will be replaced, repaired, or reimbursed is generally made at the benefit administrator’s discretion. 

What Is Covered Under a Credit Card’s Purchase Protection?

The coverage you receive will depend on your credit card's terms. Covered items generally include purchases made within and outside of the U.S., as well as gift purchases for friends and family members, as long as you use your credit card or rewards points from your associated rewards account to pay. However, some types of items are excluded (more on that below). Typically, damage coverage includes physical harm to an eligible item. For example, if you shatter your phone screen a few months after purchasing the phone, you may be able to file a claim under your credit card’s purchase protection policy. If the purchased item was lost due to theft and you file an insurance claim, the purchase protection plan will often cover the deductible portion you must pay. In many cases, the credit card issuer will require you to make an insurance claim before you submit a purchase protection claim.

What Is Not Covered Under a Credit Card’s Purchase Protection?

As with any insurance program, there are some things that aren’t covered. Exclusions can vary from issuer to issuer, but may include:
  • Items that are lost or misplaced
  • Animals and living plants
  • Antiques and collectible items
  • Any motorized vehicles (such as cars and boats) and their accessories
  • Computer software
  • Items purchased for resale, professional, or commercial use
  • Items lost in transit by a common carrier
  • Medical equipment
  • Perishables and consumables (such as cosmetics, perfumes, and rechargeable batteries)
  • Rented or leased items
  • Traveler’s checks and cash
  • Used or pre-owned items

Tips for Using Credit Card Purchase Protection

For starters, it can be a good idea to choose a credit card that offers purchase protection. If you have multiple credit cards and you're making a large eligible purchase, you may want to make sure that you are using a credit card that offers this benefit.If an item you purchase gets stolen or damaged within the coverage period, here are some tips that can help you successfully make a purchase protection claim.
  • Save your receipts. Keep copies of the receipts of your major purchases, as you will need them to file a claim. 
  • Notify the police in the event of theft. If the item has been stolen, make sure to file a police report and to get a copy of the report.
  • Check to see if you have other insurance coverage. If you have a primary insurance policy covering the item, you typically need to file a claim there before approaching your credit card issuer to use purchase protection.
  • File a purchase protection claim. If you believe your purchase is eligible for protection under your credit card, fill out an online claim form on your credit card issuer’s website. You may also be able to call in to file your claim over the phone.
  • Provide all the requested documentation. You’ll want to submit all the documents that are requested, and also provide answers to any questions that the benefit provider might have. 
Recommended: How Credit Cards Work 

Documents Required to File a Credit Card Purchase Protection Claim

To file a purchase protection claim on the phone or online, you'll likely need to provide your name, address, account number, date of the purchase, and reason for the claim. You may also need to submit the following documents: 
  • An itemized store receipt
  • Your credit card statement showing the posted transaction
  • A police report (if a purchase was stolen)
  • Insurance claim (if applicable)
  • Any documents that support your case of why a transaction should be covered by your card’s benefits

Purchase Protection vs Other Credit Card Benefits

The best credit cards typically offer other benefits related to making purchases, such as price protection, extended warranty, and return guarantee. While these benefits sound similar to purchase protection, they are different. Here’s a closer look at each of these consumer protections.
  • Price protection This benefit allows you to retroactively apply a lower price to an item that was purchased. For example, if you purchase a television today and 30 days from now the price drops by $200, this benefit would allow you to file a claim and receive the $200 difference.
  • Extended warranty This protection allows you to lengthen the time of coverage under an original manufacturer’s warranty. An extended warranty covers defects from the manufacturer, whereas purchase protection covers user damage.
  • Return guarantee Though not as commonly offered as other types of consumer protections, this benefit allows users to return an item within a certain time frame even if the retailer refuses to take it back.
Recommended: How Do Refunds on Credit Cards Work? 

Knowing Your Credit Card Company’s Purchase Protection Policy

If you’re not sure what (if any) purchase protection your credit card offers, you can find out by referring to your credit card’s guide to card benefits. You likely received this document when you got your card, but if you no longer have it, not to worry. Most credit card issuers post this document online. These guidelines should explain:
  • Who’s covered
  • Which transactions can receive purchase protection coverage
  • The timeframe for coverage
  • The dollar value limit of coverage per claim and per account
  • Deadlines to file eligible claims
  • How to file purchase protection claims

The Takeaway

One of the many advantages of using a credit card is purchase protection. If something goes awry after you make a big ticket purchase (say you drop it and it breaks or it gets stolen), you may be able to get the item replaced or repaired, or get your money back, simply by filing a claim with your credit card company. Not all cards offer purchase protection, however. If you’re in the market for a new credit card, it can be a good idea to compare credit card rates, as well as the terms and benefits each card offers. With Lantern by SoFi, you can quickly compare multiple credit card offers matched to your needs and qualifications all in one place, and without making any type of commitment.

Frequently Asked Questions

Do all credit cards offer purchase protection?
Can I claim on my credit card when something goes wrong with the product?
What should I do if an item I purchased with my credit card is stolen?
Is there a time limit on credit card purchase protection?
Photo credit: iStock/VioletaStoimenova

About the Author

Jason Steele

Jason Steele

Jason Steele has been writing about credit cards and award travel since 2008. One of the nation's leading experts in this field, he has contributed to dozens of personal finance and travel outlets and has been widely quoted in the mainstream media.
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