Credit card purchase protection

Credit card purchase protection gives you cover for eligible items if they are lost, stolen or accidentally damaged. Here's how – and cards that offer it in Australia.

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If a brand new laptop, watch or handbag was stolen from you, it would be easy to feel like your money had gone down the drain. Credit card purchase protection insurance is designed to help protect you in situations like this by giving you a way to make a claim (and get reimbursement) for eligible items bought with your card.

It's not as flashy as some other credit card features, but it can be really valuable if you ever need it. So, let's take a closer look at the details, as well as what credit cards offer purchase protection insurance in Australia.

What is purchase protection and how does it work?

Purchase protection is a type of insurance that provides coverage on new items you buy using your credit card. While the terms and conditions vary between cards, purchase protection usually includes the following factors:

  • Eligible purchases. Most retail items you buy for yourself are covered, such as clothing, jewellery, laptops or art. But there can be cover limits for some of these items.
  • What's not eligible? Purchases that don't usually get cover include secondhand items and antiques, phones bought on a post-paid plan, cars and other motor vehicles, plants, animals and household fixtures and fittings (eg. ovens and dishwashers).
  • Insurance cover. Purchase protection typically protects new products you buy with your credit card against theft, loss or accidental damage. Some policies only protect items that were purchased in Australia.
  • Insurance term. Purchase protection usually covers items for up to 90 days or 3 months from the purchase date, but can last up to 6 months with some insurers.
  • Claim limits. This also varies among insurers and cards, but it is typically limited per claim (eg, $10,000 per claim) and per year (eg, up to $50,000 per account per year).

How do I make a claim for credit card purchase protection insurance?

The claims process differs depending on your credit card provider and the underwriting insurance company, but generally involves the following steps:

  1. Contact the insurance company. Depending on your insurer and policy, you may have to file your claim within a certain time frame. For example, you may need to make a claim within 30 days of your item being stolen, lost or damaged.
  2. Provide details of the claim. To make your claim, you have to show that the item was purchased using your credit card within the eligible period of coverage.
  3. Submit any supporting documentation. Apart from original receipts, you may also need to provide other relevant documents such as police or incident reports.
  4. Wait for a response. Your claim will usually take up to 14 business days to be assessed, after which you will be notified of the result and reimbursed if successful.

Comparison of credit cards with purchase protection

Name Product Purchase rate Interest-free period Balance transfer rate Annual fee
HSBC Platinum Credit Card
19.99% p.a.
Up to 55 days on purchases
0% p.a. for 36 months
$29 annual fee for the first year ($129 p.a. thereafter)
Save money with a 0% balance transfer rate for 36 months (with no BT fee), a first-year annual fee discount and free travel insurance.
Citi Clear Card - Balance Transfer Offer
14.99% p.a.
Up to 55 days on purchases
0% p.a. for 36 months
$99
Offers 0% p.a. on balance transfers for 36 months with no balance transfer fee. Plus, complimentary insurance covers.
Citi Premier Qantas Card
21.49% p.a.
Up to 55 days on purchases
0% p.a. for 6 months
$175 annual fee for the first year ($350 p.a. thereafter)
Get 100,000 bonus Qantas Points when you spend $4,000 in the first 90 days and a first-year annual fee discount.
humm90 Mastercard
23.99% p.a.
Up to 110 days on purchases
$99
Enjoy up to 110 days interest-free on purchases, 0% foreign transaction fees and flexible instalment plan options.
Qantas American Express Premium Card
20.74% p.a.
Up to 44 days on purchases
$249
Enjoy 30,000 bonus Qantas Points, 2 complimentary Qantas Club lounge invitations per year and the protection of complimentary insurance covers.
Citi Clear Card - Cashback Offer
14.99% p.a.
Up to 55 days on purchases
0% p.a. for 15 months
$49 annual fee for the first year ($99 p.a. thereafter)
Get $250 cashback when you spend $3,000 in the first 90 days. Plus, free wine when you dine and purchase insurance cover.
St.George Amplify Platinum
19.74% p.a.
Up to 55 days on purchases
0% p.a. for 24 months with 1% balance transfer fee
$49 annual fee for the first year ($99 p.a. thereafter)
Receive 130,000 bonus Amplify Points when you spend $3,000 in the first 90 days. Plus, a 0% balance transfer offer and a first-year annual fee discount.
American Express Platinum Edge Credit Card
20.74% p.a.
Up to 55 days on purchases
$195
Earn 50,000 bonus points when you spend $1,500 within the first 3 months. Plus, a $200 statement credit offer.
American Express Velocity Platinum Card
20.74% p.a.
Up to 55 days on purchases
$375
120,000 bonus Velocity Points & 120 Velocity Status Credits when you spend $4,500 in the first 3 months.
St.George Amplify Signature - Qantas
19.74% p.a.
Up to 55 days on purchases
0% p.a. for 24 months with 1% balance transfer fee
$279
Get 90,000 bonus Qantas Points when you spend $6,000 using your new card within 90 days from approval and 2 Qantas Club lounge invitations per year.
NAB Low Fee Card
19.74% p.a.
Up to 44 days on purchases
0% p.a. for 6 months with 2% balance transfer fee
$30
Receive complimentary insurance covers and 0% p.a. for 6 months on balance transfers.
American Express Velocity Escape Card
20.74% p.a.
Up to 55 days on purchases
$0
Get 10,000 bonus Velocity Points when you spend $750 in the first 3 months, 0.75 points on your everyday purchases, uncapped, and a $0 annual fee for the life of the card.
American Express Cashback Credit Card
20.74% p.a.
Up to 55 days on purchases
$0 annual fee for the first year ($120 p.a. thereafter)
Earn 1% cashback per $1 dollar spent on your everyday purchases. Plus, an additional 5% for the first 3 months (up to $200) and no monthly fees for the first 12 months.
St.George Amplify Platinum - Qantas
19.74% p.a.
Up to 55 days on purchases
0% p.a. for 24 months with 1% balance transfer fee
$99
Earn 60,000 bonus Qantas Points, plus enjoy 0% p.a. on balance transfers for 24 months with a 1% BT fee.
Citi Rewards Card - Points & Gift Card Offer
21.49% p.a.
Up to 55 days on purchases
0% p.a. for 15 months
$49 annual fee for the first year ($149 p.a. thereafter)
Receive 90,000 bonus Citi reward Points (worth $400 in gift cards) and a $100 Coles eGift Card when you spend $3,000 in the first 90 days. Ends 31 October 2021.
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Other types of complimentary credit card purchase insurance

Some credit cards may also provide the following complimentary insurance covers for your purchases:

  • Extended warranty cover. This extends the warranty cover for items purchased using your card, meaning that you can enjoy extended warranty protection beyond the manufacturer’s warranty period.
  • Price guarantee schemes. This offers price protection so that you may be able to claim the price difference for an item purchased on your card if you find it in another store nearby at a lower price within a certain period of time.
  • Refund protection insurance. Refund protection ensures that you can still get a refund on items purchased using your card even if the merchant refuses to process a refund.

Other factors to consider when comparing credit cards with purchase protection insurance.

When considering purchase protection insurance, here are some other factors you should keep in mind:

  • Claim requirements. Time limits may be imposed forcing you to make your claim within a certain number of days after losing or accidentally damaging a new item. Certain documents may be mandatory as well, so you may need to make a police report immediately in order to make a claim for your stolen or missing item.
  • Claim limits. Most policies have an annual cap on purchase protection claims as well as a cap on each individual claim. You may wish to look into protection for international purchases if you travel or shop online a lot.
  • Annual fee. A credit card that offers complimentary extras such as purchase protection is likely to have a higher annual fee than a no-frills card. This may outweigh the benefits of complimentary extras if you rarely or never use them.
  • Purchase rate. When considering any credit card, interest rates are very important, especially if you are someone who carries a card balance. You may find that cards with complimentary freebies often charge higher rates.
  • Rewards. If earning rewards with your card is important to you, you should consider factors such as the points earn rate and rewards redemption program.
  • Cash advance rate and fee. If you withdraw money using your credit card or use your card for cash equivalent transactions, including gift or shopping vouchers and gambling, you may be charged extra fees.
  • Other complimentary extras. With increased competition among cards, the list of complimentary extras grows longer all the time. You should seek out perks that you’ll actually use and enjoy, since you’re indirectly paying for them in the card’s annual fee.

Compared to travel-specific perks like airport lounge access and complimentary travel insurance, purchase protection insurance is something that most people can enjoy on a day-to-day basis. When deciding if it’s something that you actually need, it’s important to consider the costs of the card and whether this feature will be worth it in the long term.

Pictures: Shutterstock

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4 Responses

    Default Gravatar
    LeonieOctober 25, 2016

    I live in Sydney, Australia. I purchased Japanese hotel accommodation via an online travel company last April. Our holiday had now begun but when I arrived at the hotel today I was told that the company had gone broke and had not paid the hotel and therefore my money was gone. Travel insurance told me that they would not pay am now wondering if I have any protection from visa as I paid on Visa platinum card. Accommodation cost about $1000 which I can’t afford to lose!!

      Avatarfinder Customer Care
      MayOctober 28, 2016Staff

      Hi Leonie,

      Thanks for getting in touch and I’m sorry to hear about your current situation.

      It would also be best if you get in touch with your card issuer so they may be able to help you resolve the problem. Though please note that the protection benefit for credit cards will depend on the type of card you have.

      Cheers,
      May

    Default Gravatar
    JoanneSeptember 8, 2015

    I paid for an item 8 months ago on my HSBC Platinum card but as yet it has not been supplied. Can my card’s purchase protection assist?

      Avatarfinder Customer Care
      SallySeptember 9, 2015Staff

      Hi Joanne,

      Thanks for your inquiry.

      There are a few factors that may affect your eligibility. As such, it’s ideal to check the terms and conditions or contact HSBC directly to confirm what you’re covered under.

      Please see page 50 of the terms and conditions PDF I’ve sent to your email together with HSBC’s contact number.

      I hope this helps.

      Thanks,

      Sally

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