One of the biggest advantages to using your credit card to purchase something is purchase protection. It comes with a lot of credit cards, just like travel insurance, and is an generally undervalued perk. As long as you are practicing responsible credit card habit, paying with your credit card can help secure your purchases against a lot of circumstances out of your control.
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Fraudulent Purchase Protection
This particular protection is included in all credit cards; it’s a protection mandated by law. If you are the victim of identity theft, and the thief makes a purchase using your card, you can only be held liable for $50. So even if a thief uses your credit card to buy a round trip to Bermuda, you’re only paying $50 of that. However, this is only applicable to purchases made with a credit card.
Credit Card Purchase Protection
Not all credit cards offer purchase protection. However, if you do have it, be sure to take advantage of it in the case of lost, stolen, or damaged items, and you could be reimbursed.
Be wary of exclusions, though. Many cards won’t cover items that disappeared into the void with no receipt or evidence of wrongdoing. They’re more likely to covers items stolen in a robbery or if you bought a damaged item accidentally. Again, these items have to be bought with the qualifying credit card.
Price protection enables you to always get the best deal on your credit card purchases. If you buy an item which later drops to a lower price than you paid for it, your card will reimburse the difference.
There are also plenty of exclusions in this case too, especially around the holiday season. Big sales like Black Friday are typically not counted, nor are international sales, used items, or perishable goods. Check for exclusions on your card if you plan on taking advantage of this perk.
Ever try to return something, only to be told by the retailer that all sales are final? Return protection will let you get your money back if the retailer refuses to accept the return. This protection always has a lot of exclusions, so check the fine print. You’re unlikely to get your money back on anything permanently downloaded or very expensive— most policies have a per item and yearly limit.
Extended Warranty Protection
Sometimes your favorite (or most expensive) purchases break down right after the manufacturer’s warranty expires. For this reason, many manufacturers offer extended warranties as an optional add-on to major purchases — home appliances and cars (especially used cars) often promote extended warranties. With some credit cards, extended warranty protection is built-in to certain purchases, so you don’t have to add it on.
Extended warranty protection will give you some extra time, money, or both to make a claim. Look up the specific regulations on your protection. Some cards add several years or thousands of dollars, but not all of them. Make sure you know the terms before you make a claim.
These perks go a long way towards protecting your purchases. If you have them, don’t hesitate to take advantage of them. In fact, if you wait too long, you might become ineligible. Always make a claim as soon as possible, and be ready to provide any proof possible.
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