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Whether you’re looking to make a significant purchase or simply want to feel secure on a day-to-day basis, choosing a credit card with adequate purchase protection is key. And as TPG Senior Points & Miles Contributor Jason Steele explains, there are plenty of options that earn you valuable travel rewards as well.
A thousand dollars isn’t what it used to be. It’s pretty easy to buy a laptop, television or a bicycle that costs well over that amount, yet $1,000 is the limit of the purchase protection policy on most credit cards. So in today’s post, I want to take a look at what a credit card purchase protection policy is, and the top six cards that offer the best coverage.
What Is a Purchase Protection Policy?
In general, the purchase protection policies offered by major credit card issuers will cover your purchases against accidental damage or theft for a limited time, typically for 90-120 days after purchase. This coverage is included with most credit cards, with the exceptions being some cards offered to those with poor credit.
When relying on one of these policies to cover your new purchases, you should always be aware of its exclusions, which fall into two groups. The first group of exclusions are those related to the nature of the purchase. Most purchase protection policies exclude the following:
- Monetary instruments such as gift cards gift certificates, and travelers checks
- Tickets of any kind
- Animals and plants
- Rare stamps, coins, collectibles and antiques
- Used goods
- Motorized vehicles, along with parts and accessories
- Items purchased for resale
- Permanent fixtures such as carpet, flooring, heaters, and air conditioners
- Medical and dental equipment
- Perishable or consumable items
The other type of exclusion relates to the circumstances of the loss. In general, these policies cover losses due to theft and certain kinds of damage. Excluded are items that are lost or damaged due to misplacement or mysterious disappearance. Did you leave your laptop on an airplane? Unless you file a police report claiming theft, it will not be covered. Other excluded circumstances can include acts of war, natural disasters, government seizures and failure to take proper care. So if you leave your bicycle unlocked on a New York City street, and it got stolen, your claim would likely be denied.
Just be sure to note the actual terms of your specific credit card, which may vary from the general terms I’ve described.
How to Utilize These Policies
When making a large purchase, it’s important to know the details of your credit card’s purchase protection policy, which you can find in the guide to benefits that you received with your credit card, or online. When you choose a credit card to make a large purchase, you should keep this policy in mind, perhaps even forgoing some rewards to receive full coverage against potential loss or damage.
You will always want to save a copy of your receipt, as it will be required in the event you need to submit a claim. If you become the victim of theft, these policies specify you must immediately file a police report, typically within 48 hours, in order to be eligible to file a claim. Next, you must contact the benefits administrator to begin the claims process. Finally, you’ll need to submit all of the required documentation including your receipt, credit card statement and a police report or documentation of the damage. You may also be required to file a claim with your home owner’s insurance.
What Makes for a Great Purchase Protection Policy?
I looked at the purchase protection policies for dozens of travel rewards credit cards and found three things that made some better than others:
1. The amount of coverage — Most cards have policies that only offer $500 or $1,000 of coverage, but that’s not enough to cover a wide range of consumer goods. The best cards have policies that cover $10,000 per item, which should be more than enough for most people.
2. The duration of coverage — Most policies cover new purchases for 90 days, although some last as long as 120 days.
3. Minimal exclusions — Some policies have lists of exclusions that are much longer than others. In fact, I found some significant differences in the fine print when it came to items like jewelry, or losses that occurs during travel or shipping.
Without further ado, here are the top six cards for purchase protection:
American Express offers two different purchase protection policies for its cards. The basic policy has a limit of just $1,000 per item, but it does cover up to $50,000 of losses per year, presumably for the tragically unlucky. This policy applies to most American Express cards from its Bluebird prepaid debit card all the up to the iconic Green Card. But with the Premier Rewards Gold Card and higher-end products (like Amex Platinum), the policy covers $10,000 per item and $50,000 per calendar year.
This American Express purchase protection policy covers items for 90 days from your date of purchase, and it doesn’t have exclusions for jewelry and watches. On the other hand, it will exclude theft and loss in checked baggage. The card comes along with an annual fee of $195, which is waived the first year. Rewards include 3x Membership Rewards points for airfare booked directly with the airline and 2x points for all purchases from US gas stations, supermarkets and restaurants.
This card offers the same 90-day policy at the Premier Rewards Gold Card, with limits of $10,000 per item and $50,000 per year. Unlike Premier Rewards Gold Card, the Amex Platinum card only offers 1 point per dollar for most purchases, with 2x points just for travel booked through American Express. It also offers access to Delta SkyClub lounges when you’re flying Delta, a Priority Pass Select membership and of course access to American Express Centurion lounges. Other benefits include elite status with Starwood and Hilton hotels as well as Avis, Hertz and National car rentals. For more on what makes this card great, read TPG’s post on 9 Reasons I Love My Amex Business Platinum Card.
This card has always been one of the best travel rewards cards for business use, and it’s no surprise that it has an excellent purchase protection policy. It covers new purchases for 120 days with limits of $10,000 per claim and $50,000 per account. Under this policy, jewelry and watches are excluded, as are items lost in the mail and lost luggage.
While you can get this same policy with the lower-end Ink Cash Business Card, the Chase Ink Plus is a fantastic option, offering a sign-up bonus of 60,000 Ultimate Rewards points after new cardholders spend $5,000 within three months of account opening. The Ink Plus also allows you to transfer points to airline and hotel partners, while the Ink Cash does not. There’s a $95 annual fee for this card, and no foreign transaction fees. For a look at how many points you can rack up with the Ink Plus card, read Nick Ewen’s post, A Year of Earning and Burning with Chase Ink Plus.
I’ll admit that I was surprised to learn that this card offers $10,000 of purchase protection coverage per item, especially since the Chase Sapphire Preferred only offers $500 worth of coverage. And as with the Chase Ink Plus, the coverage extends for 120 days after purchase. Other key benefits of this United co-branded card include priority boarding, a free checked bag for the cardholder and a companion, two United Club passes each year and the undocumented cardholder benefit of additional awards space. There’s a $95 annual fee for this card, and no foreign transaction fees.
This card has so many benefits that it’s no surprise it includes strong purchase protection policy. It offers $10,000 of coverage per instance, with a maximum of $50,000 per year. Coverage is valid for 120 days from purchase, but for some reason only 90 days for New York residents. Excluded are jewelry, cameras and video-recording equipment contained in checked baggage.
Apart from purchase protection, this card offers a range of impressive rewards and a sign-up bonus of 50,000 points after new cardholders make just $3,000 in purchases within three months of account opening. You’ll earn 3x points on all travel and hotel purchases; 2x on dining and entertainment; and 1x on all other purchases. Benefits include access to Admirals Club lounges when flying AA and a Priority Pass Select membership. You also get the (now easier to book) 4th Night Free hotel benefit and even three free rounds of golf each year. There’s a $450 annual fee for this card, and no foreign transaction fees.
This card offers the same purchase protection policy as the Citi Prestige, including $10,000 of coverage per claim and $50,000 per year. Likewise, coverage also lasts for 120 days for most cardholders, and 90 days for New York residents.
This card currently offers new customers a sign-up bonus of 50,000 miles after making $5,000 of purchases within three months of account opening. Other benefits include Admiral’s Club membership (for all cardholders including authorized users), elite-qualifying miles, priority boarding, priority check-in and free checked bags for yourself and up to eight others traveling together. It also offers a $100 statement credit toward the Global Entry application fee. Like the Citi Prestige, it has a $450 annual fee, and no foreign transaction fees.
There’s no need to sacrifice travel rewards for purchase protection, as all the above cards earn valuable points in addition to offering up to $50,000 in annual purchase coverage per account. Other benefits like airline lounge membership and free checked bags only sweeten the deal.
What’s your favorite card for enjoying purchase protection benefits?
Premier Rewards Gold Card from American Express
|Intro APR||Regular APR||Annual Fee||Balance Transfer Fee||Credit Rating|
|N/A||Introductory annual fee of $0 for the first year, then $195||See Terms||Excellent Credit|