Have you ever had just a terrible, horrible no good, very bad day? Maybe you dropped your 3 week old iPhone, or had your purse stolen, or came down with the flu right before your big vacation? Surprisingly, it turns out that your credit card company might be able to make your bad day a little better with purchase protection.

Yesterday was my terrible day, after I woke up to find my car window smashed and a few things taken out of my car. [Note to future self: don’t leave things in your car.] While yesterday sucked, I did learn a new, valuable bit of personal finance advice that I wanted to share with all of you. Your lost, stolen or damaged goods might be covered under your credit card’s purchase protection program.

The thought had never even occurred to me to ask my credit card company to help me out in this case, but luckily, my neighbor was walking by and told me to call them. Sure enough, one of my cards will cover up to $10,000 of damaged or stolen goods that I bought within the last 120 days on the card.

The catch is, not all credit cards offer the same purchase protection. My other card, for example? It covers stolen goods as long as they weren’t stolen from a car. Thanks for adding insult to injury, Bank of America.

So the next time you’re shopping around for a new credit card, I’d investigate what purchase protection features the card has to offer. It’s a very important, but very under the radar benefit of certain cards. Some purchase protection features to compare include:

  1. Types of coverage – Many cards don’t just cover purchases, but can also match price decreases of an item after a certain period, serve as rental car insurance, and provide trip insurance if you need to cancel last minute.
  2. Amount of coverage – All cards have a limit on the amount of money they will refund you for stolen or damaged goods, but it varies widely. The Chase United MileagePlus card covers up to $10,000 per incident, while the Discover card covers only up to $500 per incident.
  3. Length of coverage – This means the amount of time the purchase is covered after the purchase date. Most cards cover items 90-120 days after the day they were purchased.
  4. Exclusions – Ah, the fine print. Cards have all kinds of crazy exclusions for purchase protection. One of my cards won’t cover items stolen from a car, some won’t cover items lost in the mail, and many even exclude items lost or damaged due to war or terrorism. Think about the most likely way for you to lose an item, and then check if that method of loss is covered by the card.

If you do find yourself in a bind like I was, make sure you file a police report within 48 hours or save your broken item. Credit cards will generally want some form of proof that an incident occurred.

Hopefully none of you need your purchase protection, but it’s still good to have. Check your credit card to see how much you’re covered for, and think about getting a card with good purchase protection for the next time you buy an expensive item.


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