5 things to know about your card's price protection feature
By Tina Orem
February 5, 2015
There's one credit card perk that many of us hardly notice, but once you learn about it, you may wonder how you've ever gotten along without it. After all, this often-overlooked credit card provision can save you hundreds or even thousands of dollars a year — if you know how to use it.
What is this sweet perk? Price protection.
Here's how it works. Let's say you buy a new couch at Macy's. It'll set you back about $500, so out comes your Citi credit card.
Now let's say Sears has a furniture sale the following week and the same exact couch is $350 there. You know this because Sears advertised the sale, and now you're swearing up and down about the $150 you left on the table because you couldn't wait a week.
Enter your credit card's price protection feature. It's something few people realize they have, but in our example, people who know about it could save $150 because their card issuer may cough up the difference between what they paid and the lower advertised price.
“Some of these programs cover a significant amount of cash, so it could be a really great way to save,” says Jeanine Skowronski, who is a credit card analyst and reporter at Bankrate.com. Here's how the process works.
1. Stake your claim
First, you'll need to file a claim to get your money. Generally, this includes providing a copy of the advertisement showing the lower price on what you bought (make sure it's for the same item, same model number, same model year and same manufacturer).
At least one card issuer is working to make this less of a hassle. “One thing that Citi offers over all of the other price protection programs, is that you can register your purchases with its 'price rewind' program and it will search for a lower advertised price for you,” says Matthew Coan, who runs financial website Casavvy.com.
You'll also need to get a claim form from the card issuer. Look on your card's website for the details; often there's a phone number to call for price protection claims.
Beware: Claims have deadlines. Citi, for example, says the printed advertisement has to be published on the same day or within 60 days after your purchase. Also, you have up to 60 days to file a claim. Discover and the Chase Sapphire card, on the other hand, give you up to 90 days to file claims.
2. Make no assumptions
“You're going to see some common exclusions across the board,” Skowronski warns. “Sometimes jewelry is just not covered, or layaway items, animals, plants or gift cards. A product that you purchased on an auction site may not be eligible. You can't go into any purchase assuming that it's going to be covered. Having said that, you shouldn't assume that it's not.”
“If you're a valuable customer, the issuer wants to keep you and they want you to use your credit card.”
Jeanine Skowronski, Bankrate.com
Price protection also often doesn't apply to boats, motorcycles and cars, as well as anything bought or delivered from a merchant outside the United States. Perhaps one of the biggest bummers is the frequent exclusion of airline tickets (“or transportation tickets of any kind”, according to Citi's program).
There are quirky, card-by-card no-nos, too. For example, used stuff, antiques and refurbished items are not eligible for price protection at Citi, nor is anything you bought customized or personalized or at a going-out-of-business sale. Services, rare coins, gift cards, floor-model items, anything bought on an auction site, and online books, music, or anything else downloaded digitally are out at Discover. The Chase Sapphire card excludes cell phones and cell service agreements, but will reimburse you up to $50 for “advertisements of cash only, close-out, liquidation and going-out-of-business sales.” Wells Fargo's Visa Signature card won't reimburse for food or anything without a manufacturer's U.S. warranty.
3. Maxing out
Price protection has other limits, as well. “There's usually a cap per item, and then there's a cap per year of how much you can get back,” Skowronski explains. “You want to know what your cap is.”
Citi caps claims at $250 per item and $1,000 per member per calendar year, for example; Chase Sapphire and Discover cards, on the other hand, cap their price-protection payouts at $500 per item and $2,500 per year.
4. Not all the same
As you've probably figured out by now, one of the most important things to know is that not all credit cards have price protection (American Express doesn't, for instance), and the ones that do vary in what they'll cover.
The decision to offer price protection rests with the particular card issuer, which is why not all MasterCards or all Visas have price protection or the same kinds of price protection perks. Your best bet is to call your card issuer or read the fine print in your credit card agreement. “You may have read somewhere that all MasterCards have it, but it really just depends,” Skowronski gives as an example. MasterCard is indeed cagey on its website about what's covered or even how to file a claim.
5. In the end
Price protection is great to have, but it's probably not a good idea to choose a card simply based on whether it has price protection. Your spending habits and whether you tend to carry a balance are bigger factors, Skowronski says, given that a card's interest charges and late fees might create bigger-dollar worries for you than a couch sale will.
Besides, cards that offer price protection “are definitely geared toward people who pay in full or at least on time each month. For people with great credit, there are some really competitive offerings out there that have some nice perks and benefits,” she adds.
But when you're looking for a credit card, you should definitely consider price protection features during your comparison shopping, Skowronski notes. And when it comes to the cards you already have, you should definitely find out whether you have protection. Price protection features, after all, are part of a tactic to win your loyalty. “They do exist and can be very useful,” she says. “Even though you want to think they're not, if you're a valuable customer, the issuer wants to keep you and they want you to use your credit card.”