Price protection credit card cover — always get the best price
If you buy something with your credit card, then find it advertised cheaper elsewhere, price protection cover means you'll get the difference refunded.
What is credit card price protection cover?
Price protection cover is a form of credit card insurance that helps you get the cheapest price on an item. If you buy something on your card, then find it cheaper somewhere else, you can get the difference in price refunded.
There's a time limit on this cover, and limits on the amount you can get refunded too. Price protection cover is sometimes called a guaranteed pricing scheme.
Only a few credit cards in Australia offer price protection cover.
How it works
You purchase a $600 item from a shop using a credit card with price protection insurance. A few days later you receive an email from a different store advertising the same product for $500.
If the item is identical and you meet all the other requirements (check your credit card's insurance booklet terms and conditions) you should be able to get a $100 refund.
Understanding price protection cover terms and conditions
If you have a credit card that offers some form of price guarantee, you will have to meet your card's eligibility criteria before you can make a claim. You can find this in the insurance policy booklet, but it's typically something like this:
- Limited time to make a claim. The time between buying something with your credit card and making a price guarantee claim typically ranges from 21 to 60 days from the original purchase.
- Proof of the cheaper item. You'll need an email or printed catalogue advertising a cheaper price.
- Item requirements. The 2 items need to be identical in terms of model number, year and manufacturer.
- Price differences. Some cards require a minimum price difference to qualify. For example, it must be greater than $75 or you won't get a refund.
- In-store purchases only. Price guarantee policies don't typically apply if you're shopping online.
- The location of the purchased and sale items. For example, the cheaper item may need to be from a store within 25km of the store where the original item was purchased.
- Price limits. Some policies will also limit the value of the item to being no more than $10,000.
How much can you save through a guaranteed pricing scheme?
Here are some examples of when you could or couldn't use price protection cover:
Example 1: You buy a dress for $2,000 with your credit card and later that week see another local store advertising it for $1,800. If your credit card offered a price guarantee scheme, you could claim the $200 price difference.
Example 2: A few days after buying a TV for $3,000, you see another store holding a huge sale where the exact same TV is priced at $2,000. Based on most complimentary credit card insurance policies, you might not be able to claim the full $1,000 difference due to claim limits. But making a claim could give you a way to save up to $500 compared to what you originally paid.
Example 3: You buy a new watch for $200 then see another store selling it for $150 two weeks later. In this scenario, it's unlikely you'd be eligible for price protection cover as the price difference is only $50.
Pros and cons of price protection cover
Pros
- Save money. A price protection or guaranteed pricing scheme gives you a way to save on items you buy with your credit card.
- Peace of mind. If you're in a hurry to buy a product, price protection cover gives you a window of time when you can find it cheaper and make a claim.
- The price protection is complimentary. This means you don't have to pay for the benefit of the insurance policy. This type of price protection cover doesn't typically have an excess you need to pay when you make a claim, either.
Cons
- Very specific requirements. The conditions around timeframes, in-store purchases, geographic locations and price differences mean you probably won't use price protection cover very often. So make sure you consider a credit card's other features as well.
- Higher annual fees. Credit cards with complimentary insurance can have higher annual fees than more basic cards, particularly if they are gold, platinum or black cards with other perks.
Our expert says: Is price protection cover worth it?
"Given that you only have a limited window to find a cheaper price and get a refund, price protection cover's usefulness is a bit limited. You're better off doing a thorough price comparison before you buy the item. But if your card has it, it's a nice benefit. Especially in those annoying situations where you don't find a cheaper offer until after you've hit the buy button."
How to compare credit cards with price protection cover
- Look at the annual fee. Credit cards offering this type of price protection for purchases typically have annual fees ranging from $0 to $700 or more. As there's no guarantee you'll benefit from this feature, weigh this cost against the card's other features and benefits to decide if it's worth it.
- Compare interest rates and interest-free days. You'll typically get more value from purchase insurance covers like a guaranteed pricing scheme when you pay off your card each month to avoid interest. But if you think you'll pay off purchases over a few months, look for a card with a purchase rate under 15%.
- Check the policy details. Credit card insurance policy booklets include full details of what's covered and how to make a claim. They'll typically list this cover as "guaranteed pricing scheme" or "price protection cover" but it does vary. Make sure you check these details to decide if it's a feature you're likely to be able to use.
- Look at other features and extras. In most cases, you won't make price protection claims that often. So consider other features you'll be able to use more often. For example, if you regularly spend with a credit card, rewards could offer points per $1 spent. Also, if you often carry-over a balance, a low rate can offer more consistent savings.
Which credit cards offer price protection cover?
There's only a handful of credit cards on the market that offer price protection cover now.
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