One day, while browsing my local Apple store, a young couple came into the store in tears. They just purchased an iPad about five hours ago and, in their zeal, managed to drop it on the floor. The screen was badly cracked. They were wondering if Apple could do anything for them but, unfortunately, Apple couldn't. Once they made the purchase and took delivery, it was out of the company's hands.
What if I told you that, depending on your credit card, you might have recourse? Credit card companies offer a lot of under-advertised perks to cardholders in an ever-escalating battle to entice new customers. There is a whole menu of perks out there that most people don't know about, and protecting owners from their own clumsiness is one of them (Sadly for that couple, I didn't remember this while I was in the store.)
Many credit cards now offer purchase protection. They may call it something different, sometimes referring to it as damage protection, but the perk refunds your money in the event you've lost or damaged an item within a certain period of time. American Express protects against accidental damage or theft for up to 90 days from the date of purchase for up to $300 per eligible item and $1,000 annually per account. For example, if you buy a coat and rip it within 90 days, American Express will refund up to $300 if the store can't repair it. VISA calls this Purchase Security and MasterCard calls it Purchase Assurance.
Also, don't assume your credit card issuer automatically enrolls you in this or any other perk. The policies may be American Express or VISA or MasterCard specific but a card issuer has to opt into the plan because it's, in effect, an insurance policy funded by the transaction fees.
If you're unsatisfied with your purchase and the retailer won't accept the return, Return Protection lets you recoup the funds from your credit card. VISA and American Express call it Return Protection, whereas MasterCard labels it a Satisfaction Guarantee. The periods will differ but in general it's a refund up to a certain dollar amount for a specified period of time. MasterCard's guarantee is for 60 days of purchase and up to $250.
Many cards offer an extended warranty policy on purchases, so you can politely decline that "extended warranty offer" pitch by the cashier without actually declining an extended warranty. Most plans of this nature will double the manufacturer's warranty up to an additional year, giving you added peace of mind. If you buy a product with a six-month warranty, you get an additional six months. Buy one with two years, and you'll nab an additional year. American Express offers this on any product with a manufacturer's warranty of 5 years or less. American Express, VISA, and MasterCard all call this an Extended Warranty.
This is a rarer perk these days, but if you purchase something and see the price has dropped, your credit card might refund you the difference. Eligible MasterCard cardholders have to be vigilant for 60 days before the protection expires. American Express and VISA do not appear to offer this as a perk.
Auto Rental Collision Damage Waiver
The collision damage waiver is the "insurance" that car rental companies will try to sell you at the counter. If you opt for the insurance, you are not responsible for damage to the vehicle, but this is a perk many credit cards offer. In some cases, you have to explicitly opt into the service by telling your credit card company. In others, you simply get it by default as long as you rent the car with an eligible card. Carefully review the terms of your card, as this perk varies greatly from issuer to issuer.
By law, if your card is stolen or otherwise used without authorization, your liability is limited to $50, as long as you report it in a timely manner. Many credit card companies will go even further and offer "zero liability," which means that they will cover the $50 in the event there is a theft or unauthorized use.
Whereas many cards offer extended warranty and price protection, fewer cards offer custom concierge services to help you book flights, secure dinner reservations, and essentially act as your travel agent,making arrangements on your behalf. That said, take a look at your credit cards to see if this is offered, since a concierge can get you access to events you otherwise might not be able to attend. If you have a VISA Signature card, you have free concierge services.
Free "Currency Conversion"
Whenever you use a credit card abroad, you may be subject to what's known as a "foreign transaction fee." Foreign transaction fees are charged whenever a currency conversion is made. If you buy something from a foreign vendor and they charge you in the local currency, you will be charged a foreign transaction fee. Look for a credit card that doesn't charge you this fee, since many cards offer it and it'll save you some cash. Capital One is the most popular credit card issuer that has no foreign transaction fees.
These are just the some of the credit card secrets out there. I recommend you take a look at your card and see what custom perks they offer for saving money.
Jim Wang writes about personal finance at Bargaineering.com. When he's not tackling money issues, he's usually looking forward to his next vacation and writing about it at Wanderlust Journey.
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