You can enjoy peace of mind when shopping with your credit card with purchase protection, just make sure you read the terms and conditions to avoid disappointment.
The vast majority of gold and platinum credit cards offer purchase protection as a complimentary perk. You may also be able to purchase this feature on standard credit cards. Purchase protection is one of those features, along with free travel insurance and extended warranties, that has come about as a result of the competition between credit card companies in Australia.
Comparison of Credit Cards with Purchase Protection
What is purchase protection?
When you buy goods on your credit card, you may be eligible for purchase protection insurance. Usually this insurance is available for up to three months against loss, theft or accidental damage in certain situations for items purchased with an eligible credit card.
What are the types of purchase protection?
Generally, there is only one type of purchase protection with your credit card, but there are different terms and conditions that state when a purchase will qualify for cover and when the benefits will be provided. It is important to read the fine print for important information about the cover, including the exclusions and the requirements for each claim. Some claims may require an excess as well.
Although the terms and conditions of purchase protection will differ from one credit card provider to another, it usually covers against theft, loss or accidental damage that occurs within 90 days or three months of the purchase date - check the terms and conditions to see which one applies to you. Purchase protection may provide a replacement or a refund of the purchase price. There may also be an eligibility criteria that apply, such as the minimum price paid for the item, so it is always a good idea to check the terms and conditions to see exactly what protection is afforded.
How does purchase protection work?
When making a purchase with your eligible credit card, you should always keep the receipt as you will need this to make your claim. The insurer may also need you to provide other documents to support your claim.
It’s also important to know that your credit card provider isn’t the one who insures you, your credit card provider would have partnered up with an insurance company to provide you with cover. So if you intend to make a claim, you need to contact the insurer directly, not the credit card provider.Back to top
How to compare purchase protection
- Insurance policy. It should be automatically available if you’re a cardholder of the lender at no additional cost. It lasts for ninety consecutive days or three months after your purchase.
- Privacy. Your information should only be disclosed in order to monitor your claims and prevent fraud.
- Complaints and disputes. If you have a complaint about your insurance product, it is recommended that you go to your lender in person. This process should be relatively simple.
- The effort put into your claim. When making a claim, it is expected that you give your lender all the help that is required. Make sure that the instructions and documentation required is reasonable.
- Fraudulent claims. When making a claim you have the responsibility to be honest. If any claim is fraudulent you may no longer be eligible for purchase protection.
Pros and cons of purchase protection
- Peace of mind. Be covered for up to three months against loss, theft or accidental damage to goods purchased on your credit card (check the terms and conditions to be sure exactly which items are covered).
- Complimentary with your credit card. Protection purchase is usually a complimentary service with high annual fee and reward credit cards, so it may be worthwhile to take advantage of the service just because it’s there.
- There may also be a limit on how much the insurance will pay out. Some credit cards even offer refund protection, meaning that the purchase price will be refunded by the card provider should a merchant refuse a refund on an eligible item. Because many people do not particularly bother to read the fine print of their credit card contracts, nor even the smaller print easily viewable on the web page, it may not even be apparent to them that their card offers purchase protection.
Things to avoid about purchase protection
- If you have any doubts about purchase protection, don’t hesitate to call the credit card provider and ask a representative directly. If such a feature appeals to you and you can envisage a situation where you would make use of it, then it is advised that you check what is and is not covered. Do make sure you ask to be referred to the specific page in the terms and conditions so you can verify what you are being told. It is quite common that a credit card adviser can offer advice that they’re not 100% sure about themselves.
- While purchase protection is not is not perfect and does not offer total protection in every situation, remember that it is only a perk and should not be the reason for having a credit card.
Frequently Asked Questions about purchase protection
Do Visa credit cards have purchase protection?
Some credit cards in the Visa card range will offer purchase protection. Again, please check our credit card reviews to see whether this service is included.
Is there such thing as credit card with free purchase protection?
Purchase protection is generally a complimentary service associated with high annual fee and rewards credit cards. Since you’re paying such a high annual fee for the credit card, you’re rewarded with extra perks such a purchase protection.
How does it take for credit cards to have purchase protection?
Usually the service is instantly included into your credit card. When you need to make a claim, you then contact the insurer, not the credit card provider. The amount of time it takes for your reimbursement depends on the insurer and case by case basis - it may be a good idea to check the terms and conditions for an indication.
If you make purchases online or over the phone with your credit card it is worth comparing platinum or gold credit cards that offer purchase insurance. If you often buy high ticket price items you may want to consider comparing the range of Black Credit Cards.