Credit card purchase protection acts as a type of insurance against theft and damage for purchases—as long as you made those purchases in the previous 90-120 days, using your credit card. This benefit doesn’t come standard on all cards, but it is more common than credit card return protection, which covers you in case a vendor won’t accept a purchase return.
Depending on your card, purchase protection may be called “Purchase Assurance,” “Purchase Security,” or “Damage and Theft Protection.” Find out more about how credit card protection works, standard exclusions, and some standout cards offering purchase protection.
What Is Credit Card Purchase Protection?
If you purchase an item with your card, and then that item is stolen or damaged, you may be able to recover the cost to repair or replace it, up to the item’s original price. In essence, this card benefit acts as a type of insurance policy in limited situations—for example, if a thief steals your new iPhone, or water damages your laptop in the first 90-120 days.
Some policies cover purchases made with your card or with rewards you redeemed. Some policies cover purchases made for personal use, business use, and even purchases made as gifts. So, even your holiday gift recipient could file a protection coverage claim—despite not owning the card that paid for the purchase.
This coverage is offered for certain personal, business, and corporate credit cards, but not all cards do. As well, varying limits and requirements are involved. Here are a few examples:
- Limits vary widely, from $500 to $10,000 per claim. Premium cards may offer higher limits.
- Some cards have per-cardholder limits, per-account limits, and others have calendar-year limits. The maximum limit is usually up to $50,000
- A purchase protection claim usually must be filed within 90 to 120 days of the purchase.
An insurance company usually offers the underlying protection, not the credit card company itself. Some purchase protection policies name the specific situations covered (such as damage by fire, explosion, riot, theft, accidental plumbing water, or steam) while others broadly cover “unintentional events.” With broader policies, you’ll need to carefully review the “What is not covered” section of your policy.
Review your cards once or twice a year to familiarize yourself with your card’s benefits to get the maximum value. For example, you might choose to buy holiday gifts with the card that offers purchase protection.
How Does Credit Card Purchase Protection Work?
Credit card protection is typically considered a secondary type of coverage—secondary to your own homeowners insurance, for example. So, you might be expected to file a claim with your homeowners, renters, auto, or business, or any other type of insurance to reclaim damages.
Filing too many claims against your insurance policy may lead to higher rates or the cancellation of your policy.
Suppose you want to file a claim for a stolen $1,000 laptop you just bought with a card that has purchase protection. After filing a police report, you’d make a claim with your homeowners insurance. If you only recover $500 from your insurance company, you could then file a claim to recover an additional $500 with your credit card issuer.
To do so, you’d need to contact the issuer, file a claim, and follow any requirements for documentation. Documentation might include your billing statement with your purchase listed, an itemized sales receipt, a police report, and your insurance information.
If your claim is approved, an additional $500 for the stolen laptop would be coming your way. Depending on the company administering the benefit, you might receive reimbursement as a bank transfer, payment to your debit card company, or a mailed check.
If your laptop was only damaged and not stolen, the card’s benefits administrator would decide if it should be rebuilt, repaired, or replaced.
To learn more about your policy, read through the paperwork that came with your card. Some states (such as New York) may have different policies and coverage amounts.
Common Protection Exclusions
That new-to-you antique table? Not covered. A brand-new sofa? Covered. Exclusions vary from card to card—some have very few exclusions, while others have dozens listed. Exclusions can include items, as well as the situation in which the item was stolen or damaged.
The most common exclusions include:
- Items that disappear or are lost
- Used or pre-owned items
- Antiques, artwork, and collectible items
- Computer software
- Items purchased for professional or commercial use
- Currency, cash, gift cards, and other similar items
- Cars, boats, and other motorized items
Policies may have more unexpected exclusions, including:
- More than one article in a pair or set
- Medical equipment
- Rented, leased, and installment-payment items
- Items stolen from your car
- Items purchased for play, including sports equipment
Policies usually only cover particular circumstances. For example, many won’t reimburse you for items damaged due to “acts of God,” war, theft, or damage incurred while in the mail or transit via an airline.
Some policies cover some weather or natural disaster damage, but only up to a lower limit. Other policies will cover some weather events—such as windstorms, rain, and snow—but not anything beyond those mentioned, including earthquakes and floods.
Carefully read through your policy to determine if it covers the damage your item suffered.
Cards That Offer Purchase Protection
Various card issuers offer purchase protection coverage, but differences may depend on the network (Visa, Mastercard, and American Express) and whether it’s a business or personal card.
For example, Capital One Savor, SavorOne, Quicksilver, Venture, and VentureOne products may offer purchase protection, depending on which card you receive. If you’re approved for World Mastercard or World Elite Mastercard, you get Purchase Assurance. If approved for a Visa Signature card, you would benefit from Purchase Security. You’d need to review policy documentation mailed with your card or call your card issuer for more information.
Some issuers offer many cards with purchase protection—American Express offers 63 such cards. Terms may still differ, though, specifically concerning limits per item or claim.
However, this is a common enough benefit that you should be able to find a suitable cash-back or rewards card with a purchase protection benefit. Here are a few examples of cards, different limits, and benefits:
|Card Name||Annual Fee||Per-Item Limit||Cardholder Limit||Benefit|
|Chase Sapphire Preferred||$95||$500||$50,000||Despite a lower per-item limit, this generous travel-rewards card covers purchases for 120 days instead of the typical 90 days. As well, gift recipients can file a claim under the policy. However, many Chase cards come with these perks, including the Chase Freedom Unlimited, and business cards may come with higher per-claim limits.|
|Blue Cash Everyday from American Express||$0||$1,000||$50,000||Like most American Express cards, this card covers many natural disasters for up to $500, which you may or may not be able to find in other cards. The per-item limit is higher than some other cards, which could be helpful for a cash-back card focused on everyday purchases, including those at certain department stores.|
|Platinum Card from American Express||$550||$10,000||$50,000||This luxury charge card may be a good fit for business travelers—purchases are covered for up to $10,000, and the policy includes purchases intended for business use.|
|Costco Anywhere Visa Card by Citi||$0||$1,000||$50,000||Costco members may appreciate the perk—the cash-back Costco Anywhere Visa provides primary Damage & Theft Protection (except in New York). If you need to file a claim, you don’t have to file with your homeowners policy first. Also, you have 180 days to file the claim.|
- If something you’ve bought with your credit card is stolen or damaged within 90 days of purchase, purchase protection could help you recoup costs.
- To file for purchase protection, you may need first to file a claim against your homeowners, renters, or auto insurance policies.
- Purchase protection comes with rules that could limit your opportunity to recoup your expenses, so read the documentation thoroughly and move quickly if you’re considering a claim.
- Many cards offer purchase protection, and it’s something you can find in an everyday, no-fee card if you wish.