Credit card selection tends to be all about the numbers. We all know how to calculate and compare rewards, interest rates, and fees, so these tend to be the main deciding factors when deciding what to carry in our wallets. However, credit card companies offer all kinds of other benefits that most of us know very little about and can't really quantify for our decision-making.
Two such benefits include purchase protection and return protection, both of which give consumers some degree of protection from their purchases, above and beyond what merchants offer. Like insurance, you never know how important this can be until you need it.
This protection kicks in when a merchant otherwise won't let you return something that you bought. For example, if Macy's has a 30-day return policy and you realize on day 31 that your new cashmere sweater doesn't quite fit you right, your credit card company may be able to help you out.
Purchase protection can be even more valuable, since this is what covers your new toy in the event that it breaks or is stolen. Depending on what sort of retailers you're buying from, damage may or may not be covered by their return policy, and theft is certainly not covered. But if you made the purchase with your credit card, your issuer could be more helpful.
What does your credit card cover?
Be sure to check your card's terms to see what exactly is covered, but as a general rule this is what we've found:
American Express cards offer both types of protection.
- 90 days return protection of up to $300 per incident, and limited to $1,000 annually. There are plenty of restrictions listed, but it definitely covers clothes.
- 90 days purchase protection against accidental damage or theft, up to $1,000 per incident and $50,000 annually. It covers purchases worldwide and will either replace, repair, or reimburse them as long as you provide proof of theft, accidental damage, or vandalism.
Visa offers purchase protection on all Signature cards, but return protection depends on the issuer.
- 90 days return protection is offered on some cards, depending on whether you are enrolled in the program. Items can be returned for any reason and you'll be covered for $250 per item and up to $1,000 annually, as long as the Benefit Administrator receives it in "like-new/good working condition."
- 90 days purchase protection is offered to Visa Signature customers and covers $500 per claim and up to $50,000 per cardholder. Items will be replaced, repaired, or reimbursed "at the Benefit Administrator's Discretion... in the event of theft, damage due to fire, vandalism, accidentally discharged water, or certain weather conditions."
MasterCard appears to offer both types of coverage on most cards, but when we searched the agreements of specific cards, we rarely found any mention of return protection. So make sure you verify with your cardholder's agreement.
- 60 days of return protection of up to $250 per item. No annual limit is disclosed, but then again MasterCard also had the least clear disclosures.
- 90 days of purchase protection are offered, and the rules aren't as detailed as with Amex or Visa, but you can assume the rules are similar.
Who's missing from this list?
In our research, Discover was noticeably absent. They do not seem to offer either type of protection on any of their cards, which seems like a drastic oversight. While this won't be a deal breaker for most card users, it's definitely worth bearing in mind if you're comparing cash back credit cards, and trying to decide between the Amex or the Discover (hint: go with the Amex. We like the Blue Cash).
Readers: Have any of you used these types of programs in the past? Do they work as advertised? Or have you had any exceptionally positive or negative experiences with certain credit card types?