Americans plan to spend nearly $1,000 this year on the holidays, the bulk of it going toward gifts for family and friends. The right credit card can protect those special purchases from fraud, price drops and future damage. Here’s how.
Online Shopping Protection
Online shopping has become a convenient way to get holiday shopping done without braving crowds in malls and big-box stores. But with more online sales comes more opportunities for fraudsters to exploit ill-equipped e-retailers, according to Javelin Strategy and Research. Last year, online credit card fraud jumped by 40%, the firm found. Some credit card issuers offer two features to combat this fraud. Wells Fargo Visa cardholders can create a secret password that’s required before completing a purchase online. On some cards, Bank of America and Citi will issue a temporary credit card number for online or catalog transactions when requested. The temp number is linked to your account and comes with spending limits and expiration dates that you establish. While you may have to update the temp numbers at websites you frequent, it hides your permanent account number from hackers.
During the holidays, it’s not uncommon to find a gift item you bought at a much lower price before you’ve given it, either at another store or the one where you originally bought it. Often a retailer will refund you the price difference. If it doesn’t, though, the credit card you used for the purchase might pony up the price difference, if it offers price protection. This benefit is not universal. All Citi and Discover credit cards come with price protection, while only select cards from Capital One, Chase, Wells Fargo, Barclays and Bank of America have this perk. American Express doesn’t offer it at all. Typically, there is a per-claim dollar limit (of up to $500) and annual limits for total refunds (of up to $2,500). Additionally, you have a limited time to find a better price, anywhere between 30 and 120 days, depending on the card. The lower price can’t be a result of a going-out-of-business, discontinued, close-out or limited-quantity sale, among other conditions. Check your card’s benefits guide for restrictions, which vary by issuer. Be aware that certain items also aren’t eligible for price protection. Common exceptions include:
- Boats, cars and aircraft
- Tickets for shows, flights, concerts and sporting events
- Plants or animals
- Refurbished, secondhand, customized or special-order items
- Traveler’s checks, precious metals, coins or any currency
Tis the season for spontaneous purchases you may later regret. The good news is if the store won’t allow you to return the item for a refund, your credit card may accept it under its return protection policy. MasterCard and American Express cards offer this benefit. Generally, there is a time limit to file your claim along with dollar limits per item and per calendar year. For instance, American Express says you can return an item within 90 days of purchase up to $300 per item and $1,000 per year. You typically need the following to file a claim:
- Receipt for the item
- Credit card statement showing the purchase
- Copy of the store’s return policy
- Store letter showing it declined the return
Say “Santa” bought your kid the latest (and pricey) video game console with your credit card. A month later, someone accidentally drops the things and it breaks. Typically, you’ll be hard-pressed to get the retailer to make you whole, but if the credit card offers purchase protection, you can get reimbursed for the price of the console. Cards that offer this perk include some Visa and Mastercard cards, along with Discover cards (until the end of February 2018). This benefit covers items you purchased on the card that are accidentally damaged, stolen or lost up to a certain period after original purchase. Like other shopping benefits, there are per-item dollar limits and annual limits. Most cards won’t cover stolen items without a copy of a police or incident report. You will also need to provide the original receipt when filing a claim.
Your credit card can also help protect expensive holiday gifts you give your family beyond the manufacturer’s warranty period—and well beyond the period of the card’s purchase protection coverage, too, if it offers that perk. This benefit adds one to two years to the manufacturer’s warranty for repairs or replacement, depending on the issuer. While the benefit has per-claim limits, they are typically higher than for other shopping protections credit cards offer. You can typically receive $10,000 in coverage for a single item.