Credit card purchase protection programs are becoming an increasingly standardized feature with most issuers, but is possibly one of the least understood aspects of the card itself. It not only allows a buyer to protect themselves against unauthorized usage of a compromised card, but can also provide users with an extended warranty, or even theft protection package for all products that are purchased using the card.
This essentially means that a fully encompassing purchase protection plan provides a level of security beyond that of even what paid-for extended warranty programs from retailers can offer. By then taking just a few minutes to dig into exactly how it is that these sorts of programs work, a buyer can find out how much safer they are using their card to buy instead of going through cash, and how much money they are saving against similar programs by doing so.
Purchase protection programs are included as a feature for most credit cards, mainly because enhanced card security helps the credit card companies to ensure that customers feel safe using them. The feature will usually work by either doubling any approved manufacturer’s standard warranty (thus allowing the buyer to return their item after a longer period of usage than would otherwise be required), or will provide borrowers with 12 additional months of warranty coverage on a standard item.
From here, they will often then take the coverage a step further by providing customers with theft insurance on an item that has been purchased within the last 90 days. This means that a customer can be reimbursed for an item if it is stolen or damaged within the first 90 days of usage. This second item is a huge benefit for purchases such as electronics, which might be at risk of theft while they are being relocated from a store to a residence.
While the benefits of using a credit card’s embedded purchase protection are pretty clear, there still remains the question of where it is that the customer winds up actually paying for this service. While basic protection programs will still exist even on free cards, we need to be aware of whether or not our program is being cut short because we are using a cheaper card. For example, a credit card that comes with a higher annual fee might enjoy a higher coverage limit for warranty or protection claims than a smaller one.
We must therefore keep track of how it is that our coverage limits compare to our card limits, so that we don’t purchase anything that is not covered by the policy. From there, it might be that the card with the higher annual charge has a more inclusive list of products that are covered for purchasing protection. This means that we would need to be aware of how it is that specific purchases might not be covered by the warranty plan.
The final aspect of credit card purchasing protection that buyers should keep in mind is how it is that the program compares to paid-for programs. While credit card protection will be included in our annual fee (if there is any at all), retailers will often offer similar programs with competitive rates. We must therefore decide if there is a benefit to having extended coverage through the retailer at an incremental cost (such as a longer coverage period, or a more inclusive policy), while remembering that we have existing coverage already. There’s no need to double up on protective policies if they both cover the same risks.