Credit card purchase protection

How to safeguard your credit card finances with complimentary purchase protection insurance.

Purchase protection is a common complimentary credit card perk, especially when it comes to black, platinum and gold cards. Sometimes, you can also add this feature to standard credit cards for a fee. Inclusions will vary from card to card, but purchase protection usually offers insurance for up to three months when products bought with your card are lost, stolen or accidentally damaged.

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. Not all items are eligible for purchase protection. Perishables or consumables are often excluded from cover. Motor vehicles and vehicle parts could also be excluded. Most other retail purchases will generally be covered, but you should carefully read the specific terms and conditions of your coverage in your credit card product disclosure statement to find out exactly what applies.
• 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 extend 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:

• 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.
• 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.
• Submit any supporting documentation. Apart from original receipts, you may also need to provide other relevant documents such as police or incident reports.
• 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

Rates last updated July 22nd, 2017.

American Express Platinum Edge Credit Card

First year annual fee waiver has been discontinued.

July 4th, 2017

American Express Platinum Business Card

A new 120,000 bonus Membership Rewards points offer, which is valid until 2 October 2017.

July 5th, 2017

NAB Premium Card - Exclusive Offer

A new exclusive offer of 0% p.a. for 24 months on balance transfers which is valid until 31 August 2017

July 17th, 2017

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Jonathan

			Purchase rate (p.a.)	Annual fee	Balance transfer rate (p.a.)
	American Express Essential® Credit Card	Get Smartphone Screen Insurance of up to $500 when you pay for your phone or contract with your Essential Credit Card.	14.99% p.a.	$0 p.a.	0% p.a. for 12 months with 1% balance transfer fee	Go to site More info
	Qantas American Express Discovery Card	Take advantage of purchase protection repairs or replacements on eligible items if they are accidentally broken or stolen within 90 days of purchase.	20.74% p.a.	$0 p.a.	0% p.a. for 12 months with 1% balance transfer fee	Go to site More info
	HSBC Platinum Credit Card	The HSBC Platinum Credit Card offers purchase protection cover for eligible purchases.	19.99% p.a.	$99 p.a.	0% p.a. for 22 months with 2% balance transfer fee	Go to site More info
	American Express Velocity Escape Card	Earn uncapped Velocity points on purchases and redeem for a range of rewards including flights, accommodation, car hire and gift cards.	20.74% p.a.	$0 p.a.	0% p.a. for 12 months with 1% balance transfer fee	Go to site More info
	American Express Platinum Edge Credit Card	Receive a $200 Travel Credit every year and complimentary domestic and international travel insurance.	20.74% p.a.	$195 p.a.	0% p.a. for 12 months with 1% balance transfer fee	Go to site More info
	NAB Premium Card - Exclusive Offer	Exclusive to finder.com.au, enjoy a no fee, long-term balance transfer offer with platinum privileges.	19.74% p.a.	$90 p.a.	0% p.a. for 24 months	Go to site More info
	ANZ Frequent Flyer Platinum	Get 50,000 bonus Qantas Points when you apply online, are approved and spend $2,500 on eligible purchases within the first 3 months.	19.99% p.a.	$0 p.a. annual fee for the first year ($295 p.a. thereafter)		Go to site More info
	HSBC Platinum Qantas Credit Card	Receive 60,000 bonus Qantas Points when you meet the spend requirement and earn up to 1 Qantas Point per $1 spent.	19.99% p.a.	$199 p.a.		Go to site More info
	Virgin Australia Velocity Flyer Card - Exclusive Offer	Apply by 31 July 2017 to earn bonus Velocity Points for the first three months and a $129 Virgin Australia Gift Voucher each year.	20.74% p.a.	$64 p.a. annual fee for the first year ($129 p.a. thereafter)	0% p.a. for 18 months	Go to site More info
	ANZ Platinum Credit Card - Exclusive Offer	Receive a low introductory offer of 0% p.a. on purchases for 3 months and 0% p.a. on balance transfers for 12 months.	0% p.a. for 3 months (reverts to 19.74% p.a.)	$0 p.a. annual fee for the first year ($87 p.a. thereafter)	0% p.a. for 12 months	Go to site More info

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.