How My Credit Card’s Purchase Protection Plan Saved My iPhone 4 
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Do you know what the most popular iPhone 4 app is? It’s not angry birds, and well I guess it’s not really much of an app at all, but a majority of the people I know with an iPhone 4 have at one point or another seen the dubious spider cracked screen. Almost as ominous as the Windows blue screen of death, if you’ve been fortunate enough to never drop your phone, consider yourself lucky.
About a year ago, I decided to upgrade to an iPhone 4 and within a month I had already dropped the phone and shattered the screen. I was seriously heartbroken, it takes a lot for me to make a big purchase like that(I’m cheap!) and now I was going to have to buy a new one or pay Apple a ridiculous $200 replacement fee. As I was contemplating my options, I remembered about my credit card protection plan. At the time, my card was an AMEX Gold that I was trying out. It turns out they had an awesome retail protection plan that goes way beyond lost or stolen items.
I love taking advantage of credit card sign-up bonuses but this was the first time I was aware of any type of protection plan for my purchases. In order for AMEX to cover the replacement cost of my phone, I had to write a letter saying I had no other form of insurance, get it notarized and have it sent in. I took my old phone to the Apple store, paid for a new one and AMEX credited me the $200. It was a pretty simple process and it turns out that almost all credit card companies offer some type of protection against these types of events.
I’ve found that AMEX tends to offer some of the best purchase protection, but almost all cards offer some type of plan. Make sure to check your specific card(s) for details on their plan. Here’s a list of some of the more common benefits and some of the companies that offer them:
Purchase Protection – AMEX, Citi, Visa Signature
This is the big one and the best thing about all of these plans is you’re automatically enrolled when you get the card. Purchase protection will protect your eligible purchases for up to 90 days from accidental damage or theft. Not everything is covered, but most every day type purchases will apply. Although there is a $1,000 limit per occurrence for AMEX, so don’t go breaking anything too expensive.
Return Protection – AMEX, Citi, Visa Signature
If you ever change your mind about a purchase, or the merchant tries to charge you a restocking fee, try this one out. Citi offers a 60 day return window, up to $250 each time while AMEX offers a 90 day return window, up to $300 each time.
Extended Warranty – AMEX, Citi, Visa Signature
I don’t think I’ve ever paid extra for a warranty because I’m not a huge fan of insurance in general. But with many of today’s cards you can have access to up to an additional year warranty on your eligible purchases manufacturer’s warranty.
Price Protection – Citi
If you buy something with your card and you see it advertised in print within 60 days, your cardholder will refund to you the difference, up to $250. It might be a hassle to check on the price of everything you purchase 60 days later, but this one could come in handy if you happen to notice a price reduction.
Event Ticket Insurance – AMEX
If you bought tickets to a certain event and you’re unable to go for some reason, you could be reimbursed for the entire cost up to $1,000. If you’ve ever purchased tickets on Ticketmaster’s website they hit you up with this enticing offer right before you purchase. So if your card offers this protection, be sure to decline this option.
Roadside Assistance – AMEX, Citi, Visa Signature
I love my AAA membership because I am pretty good at locking my keys in the car. So I haven’t tried my credit card’s roadside assistance yet because AAA gets out there so quickly, but in theory this service could save you some cash. But make sure to double check whether your card will pay for the service or just the concierge service part.
Car Rental Insurance – AMEX, Citi, Visa Signature
Most people know about this one but it pays for covered damages (physical damage and theft) to a rental vehicle when your card is used to initiate and pay for the entire rental transaction and you decline the car rental company’s collision, loss/damage waiver.
Travel Accident Insurance – AMEX, Citi, Visa Signature
This one’s a little dreary but should you have an accident while traveling, your dismemberment or death may be covered up to $100,000. Yikes!
Baggage Insurance Plan – AMEX, Citi, Visa Signature
As long as you charge the full fare to your card, you could receive up to $3,000 in lost luggage reimbursement. I don’t think my luggage is worth a tenth of that, or wait, maybe it is..
No Foreign Transaction Fee – AMEX, Citi, Chase
This one isn’t really a secret but it’s good to know which cards you can take abroad without having to pay foreign transaction fees. See if your card provider will provide you with a chip card too, they’re becoming the norm all across Europe.
It may be hard to keep track of all these benefits and I don’t think it’s necessary to carry around a bunch of cards for different types of purchases but keep these in mind. If you ever find yourself locked out of your house or looking for your baggage at the airport, see if your credit card company can help you out!
Readers, have you taken advantage of any of these benefits? There’s gotta be some that I’m missing, so let me know in the comments.
About the author: Harry Campbell lives in San Diego, CA where he works as an aerospace engineer, volleyball coach and financial blogger, in that order 
On his personal finance blog, Your Personal Finance Pro, he talks about everything from making money on sold out event tickets to asset allocation for retirement. His blog is geared towards young professionals, but there are investing tips and tricks for all ages.
50 Comments
Good to know, there are more types of insurance in there than I was aware of.
I have definitely used the Visa car rental insurance option before. I saves a TON of money when you’re under 25!
Anne @ Unique Gifter recently posted..Aged Books
Yea the car rental insurance is pretty standard on most cards now. Although they’ll still try and offer it to you!
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
I wish I had a protection plan since my iphone just went through the washing machine
Sean @ One Smart Dollar recently posted..The Rise of Female Traders
Ah man that sucks! I dropped mine in the toilet but I dried it out and left it in a container of rice for a few days and it seemed to work pretty well after that.
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
This is great – I knew about something (rental car insurance, baggage insurance), but not others (price protection, event insurance). I have actually used the baggage insurance when the darned airline broke my luggage!
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Yea! I actually just submitted a claim for Amex’s event protection plan for a concert I was unable to attend. The ticket was only $45 but if it can be reimbursed that’d be awesome.
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
I did not know about all of the things covered by a credit card. I got to take advantage of the car rental insurance rider a few years back when I got into a small accident while on vacation. All we had to do was pay $100 and the card covered everything else. The card is through USAA, which we also have our car insurance through. Thankfully our insurance did not go upas a result.
John S @ Frugal Rules recently posted..My Dance With Credit Card Debt (And How I Got Out of it)
That’s awesome, I’ve always been curious to see how it would play out if I got into an accident and I had to contact my credit card company to deal with everything.
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
Glad to know it worked so easily! I’ve known about these programs, but have never had to use any of them, and assumed it would be a nightmare… Good to know it doesn’t have to be!
It’s not as easy as contesting a transaction online, but I think they throw a couple hoops for you to jump through so people don’t abuse the system. I wouldn’t risk insurance fraud though for a couple hundred bucks
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
A good deal of advice on protecting your iPhone. Unfortunately I shattered mine without any coverage.
Thankfully I replaced it with a work iPhone and canceled my cell phone bill. So it’s all good.
Jason Clayton | frugal habits recently posted..Pay off your Mortgage Early without Refinancing – 6 Easy Strategies
You can actually buy new screen kits on amazon now(I think they’re around $30) but they’re pretty difficult to install. There’s a big third party market though for iphone 4 screen repair though. I think apple made the screens so shatterable on purpose, so they could charge $200 a pop for a new screen
haha
I need a card with this! When my iPhone was stolen in June one of the first things I checked was if I had any kind of coverage like this and I didn’t =( definitely looking for a new card when I get the iPhone 5!
Ah that’s a bummer, I think I installed some kind of stolen iphone app on my phone, but not sure how well it would work. I’m kind of addicted to credit card bonuses so I have a lot of cards with good rewards
I think the B of A 123 cash back card has most of the protections I listed above and it has no annual fee.
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
These benefits are easy to overlook but could be saving you some dollars! Check out all the ones that Chase offers below:
Ah I’ve been waiting for a good Chase Sapphire offer. My friend got a targeted offer in the mail for 100k sign up bonus so I’ll probably hold out for a while longer. Their benefits look pretty comparable to AMEX gold though.
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
I love all of the little extras you get with credit cards that no one knows about. I haven’t had to use any yet but am glad I know they are there in case I need them!
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Yea it can be hard to keep track of all of them but luckily you’re fully enrolled in most of them just by making the purchase with your card. So if any of them happen to you, just call up your CC company and see what they can do.
I get so consumed with the cash back and other incentives that I often overlook the other bonuses that come with credit cards. I need to look into mine a little more and see what they might offer, but from your list it looks like my Chase cards would only help with the foreign transaction fees.
Yea a lot of people get consumed with cash back rewards, which card they should spend on groceries, or gas, etc. But I like to focus on the big things like a $750 sign up bonus or 50,000 rapid reward points
If I’m getting a lot in cash back rewards that also means I’m spending a lot right ? haha
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
That’s great you were able to use the protection plan on your Amex! I unfortunately, shattered my iPod touch and had no such coverage. You’re right – it is the ominous “spider cracked screen” of death! And it’s increasingly popular
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Luckily, there is now a huge third party market for new screens. If you’re out of warranty, then I would definitely go this route. We’ll see how tough the new iPhone 5 screens are
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
Sorry to hear about your misfortune! I invested in quite an expensive ‘Otter Box’ case which is very drop-proof. So far so good…. My friends who have broken their screens have all had fantastic experiences with Apple staff in the stores… they have all played the ‘I am poor card’ and had the screen replaced FREE OF CHARGE. I know of about 5 different people this has happened to; it does go on your ‘Apple account record’ but well worth a shot!
Savvy Scot recently posted..Thoughts on the iPhone 5
Hmm interesting, none of my friends have been successful sweet talking their way to a new phone but I guess it’s worth a shot. I actually really like the look of the phone which is why I didn’t want to get a bulky case like the otter box. The otter box works really well, but I feel like my phone looks like a tank with it on, haha
Always worth a shot
– I should have said, I got the skinny version of the Otter Box – I can’t remember the exact model but it’s not the full blown tank protector!
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Nice!
Harry @ PF Pro recently posted..How to Really Save Money at Chipotle
Thanks for all the information!
Apple’s policy has a Customer Intention Clause (or another name along those lines.) It’s basically a good will cause where you can get your phone replaced for free regardless of whose fault it is (as long as you weren’t intending on ruining it). I drowned my iPhone once, and they gave me a knew one. My friend dropped his phone some how and the wi-fi stopped working, so they gave him a new one. Then he complained it was really laggy, so they gave him ANOTHER new one. My friend (used to work at the downtown location) says that as long as you’re really nice to them, they’ll give you another one free of charge.
Elle P. recently posted..A little tidbit about saving on auto insurance
Interesting, maybe I’ll have my girlfriend take in my phone next time I break it since she’s a lot prettier and nicer than me, haha. But that’s interesting to know that they have that internal policy. Because their public policy obviously does not say that. In fact, they have a water sensor in the USB port area that they look at and can tell if the phone has been submerged or not.
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
It’s so easy to overlook a look of these benefits on cards with all the terms and conditions in the paperwork you get. Good on you for using this to your advantage though!
I actually had done the exact same thing, but with my iPhone 3G a while back. I must have dropped that thing a hundred times and was amazed that it never broke. Then I finally dropped it and it landed perfectly face down. I thought the ideal distribution of pressure would be the only time it would be safe but of course it spidered all over the place. Pretty much why I never plan on getting expensive phones again.
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Ah that sucks, but it sounds like you had a pretty good run with it no? Now that the iPhone 4 has been around for a while, you can get a do it yourself new screen kit on amazon or find someone on craigslist to do it for you, not too expensive either.
I bet the bottom-feeder cards don’t offer anything like that, only grief and exorbitant fees.
You’re right, most of them don’t, but there are quite a few that still offer benefits and have no annual fee. I use the B of A 123 cash back card, and I believe some of the citi no annual fee cards have some of these benefits.
Thanks for the info as I wasn’t aware of most of them. I’m certainly going to look into this now. It’s true many people don’t read through the fine print. I’m just trying to catch up as I was one them before! Cheers Mr.CBB
Canadianbudgetbinder recently posted..What Most Women Want In A Man… and It’s Not Always Money $
Yea there is a ton of fine print with these deals since they are all insured by an outside company, not the credit card company. You will usually have to submit a claim to the insurance agency, but it isn’t too much work.
I did once have to use the rental car insurance when we were hit by another driver on a business trip. She ended up paying the damages, but we had to get proof of insurance so we didn’t get a ticket. Take a copy of your card agreement to serve as insurance when you get a rental in case of accidents or if you get pulled over .Your company can send one before your trip.
Kim @Eyesonthedollar recently posted..Rental Property Series: Renovating Our Rental Property
Hmm that’s weird that you would need proof of insurance for a rental car. I thought they were insured, you just had to accept or deny the collision waiver. Either way, I’m glad it worked out for ya!
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
I’ve definitely used the car rental insurance option. Do iPhone screens really break that easily? You always here about it. Hopefully I won’t have that problem with my new phone since it has gorilla glass.
I had a bumper on my phone when I dropped it from about 3 feet getting out of the car and it landed on the bumper but still shattered
I seriously think there’s an apple conspiracy going on but I seem to be on an island on that one haha
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
Yep, I had the problem basically the same of the guy above! When the iPhone 4S came out last year I got it about two weeks after the release. Now im usually against getting insurance cover on a phone because it`s very expensive and ive never claimed on any over the years.
So I bet you can guess whats coming next
When i took out the contract for the iPhone I decided against having insurance cover, they want £12.99 a month (about $18) I thought to myself because I have never needed to claim in the past i would not take out the cover plan. Two week of having the phone it fell out of my pocket while getting out of the car and land on the hard road surface and cracked the screen. Guess how pissed I was for not taking out the cover package.
It cost me almost £180 (about $250) to have the phone repaired. That`s the annoying thing with phone insurance cover when you have it you never claim on it. When you don`t have cover the worst happens!
WHY!!!
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I don’t think they offered insurance through my carrier, AT&T, but I probably would have gotten it and just dropped the phone in the ocean or something and gotten a new one after a year, then cancelled
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
Glad to hear Amex credited you $200! Although it has fee, I adore my American Express Gold card because the customer service has always been top-notch and the perks have paid that pesky annual fee numerous times over.
Other ‘free’ credit cards are vying for my business but it is difficult to make the switch.
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Yea I signed up for the gold a year or so ago, and I have another year of no annual fee. This card by far has the best benefits and their customer service is freaking amazing! But the $175 annual fee is a lot to have the pleasure of spending money haha. We’ll see what happens in a year when I have to pay
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
We really should get protective cases for our phones…they’re not iPhones, but they are expensive and not paid for via credit card. Maybe we should have!
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Yea cases are a good idea, but it takes away from the look of the phone. I really like the look of the iphone but when you slap a huge case on it, it really takes away from it IMO. And of course the more minimalist cases provide less protection
Crap! I had no idea this existed. I guess that might go with reading the fine print or something. I actually don’t even use my CC’s anymore. I have been really good with not spending money that i don’t have.
But I do have a us bank CC but not sure they offer that kind of stuff.
Either way god to know information
Ryan @ Planwise recently posted..Every cloud has a silver rim.. er .. lining
Nice, if you’re on a tight budget, getting rid of cc’s is definitely a good idea!
Harry @ PF Pro recently posted..Part 2: When to Rebalance Your Retirement Accounts
That sucks about your phone. My wife made me buy an Otter case, which is ugly as sin but has let my phone bounce on two occasions without cracking the screen.
BTW, I wrote a piece for a client recently on car rental coverages. Let everyone know that they shouldn’t assume their credit card will cover it. The web is full of ugly stories about credit cards denying claims and people assuming they were covered adequately.
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Yea I’ve heard that too. I usually pay with my amex gold so I kind of assume their car rental coverage will be good like all their other services but you never fully know until it happens.
Harry @ PF Pro recently posted..Part 3: How To Rebalance Your Retirement Accounts
I have had a credit card and previously misused it and got myself in far deeper debt than was healthy and for a while became staunchly anti-credit. After a couple of years, clearing the debt and having ripped up my card to ensure I wasn’t foolish again, I decided I have learnt from my mistakes and reapplied and got a Visa signature card.
I always ensure my balance is zero when I receive my salary, and I only use it for purchases where I have protection, otherwise I use cash. My new better-disciplined self now sees the benefit of using a credit card, and it’s not for spending your monthly salary in advance, as many seem to think, including me in the past.
From reading your post, I’m thinking of looking into AMEX as they seem to have the best protection choices but so far I’ve been happy enough with Visa. I learnt much from your post, as I wasn’t aware about car rental insurance, and have always simply taken out the insurance provided by the rental company.
I don’t have an iPhone4 but it’s reassuring to know that buying a potentially fragile item like that is not such a risk with credit card protection.
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Tom, I’m glad to hear you were able to turn things around. I see why the temptation is there but as long as you use your card for purchases you would have made otherwise, there are some awesome benefits. I’ve also written about the potentially awesome sign up bonuses you can get!
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