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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 American Express (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 credit 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 a business out of selling 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.