Have you ever agonized over a purchase — researching reviews, comparing models and tracking prices — only to find out the item you finally bought dropped in price a week later? It’s definitely frustrating, but your credit card might offer a benefit that would put the difference back in your wallet.
It’s called price protection. Only some credit cards offer it, and there are some caveats. Here’s how it works.
How Credit Card Price Protection Works
Even though price protection benefits vary among card issuers, they tend to follow the same model, says Jim Vogt, accounting lecturer at San Diego State University. “If you purchase a qualified item with the qualified credit card and then find the identical item for a lower price elsewhere, you can file a claim with your card issuer for a refund of the difference,” he says.
Vogt notes that some card issuers will automatically check for lower prices, but you’ll be required to register your purchase ahead of time for that to happen. Usually, though, “The onus often falls on the consumer, who must track and research prices, and then must file a claim within the time limit,” he says.
Generally, price protection programs institute a maximum reimbursement amount for each purchase, as well as a yearly max for claims. According to Vogt, individual purchases are usually reimbursed up to $250 to $500, while annual limits are typically between $1,000 to $2,500.
“There are also time limits for claims,” says Vogt, which can range from 60 to 120 days after the purchase. “Sixty to 90 days is most common.”
[Read: The Best Cash Back Credit Cards of 2018.]
There are a number of items that often aren’t covered by price protection. Those items can include jewelry, art, antiques and collectibles, services and perishable items. Additionally, coverage is usually limited to purchases made within the U.S.
Price Protection Benefits on the Decline
Because price protection often puts the responsibility of finding and reporting price changes on the cardholder, not many people took advantage in the past. But thanks to newly developed price-tracking apps, more consumers have been filing claims lately.
Sukhjot Basi, the co-founder and CEO of Bank Yogi, an app that helps consumers collect cash back, rewards and free insurance coverage, says that this technology has led credit card companies to significantly reduce their price protection benefits or cut them altogether.
For example, he says, price protection is no longer a core benefit offered by American Express or Visa. Chase also decided to end its price protection benefits as of Aug. 26, 2018, while Citi reduced its Price Rewind coverage amounts by 60 percent to $200 per transaction and $1,000 per year.
In addition to the increased number of claims, says Basi, some mobile apps and websites have also been abusing credit card price protection programs. “Without even their subscriber’s knowledge, these apps have been filing claims for amounts that are as little as 20 cents.” This, he says, has significantly increased the cost of claim processing for banks.
[Read: The Best Travel Rewards Credit Cards of 2018.]
Credit Card Companies That Offer Price Protection
Even though credit card companies are slashing their price protection programs, there are a few that still exist.
— Barclays: Barclays offers price protection on several of its cards, but the benefits vary depending on whether it’s a Visa or Mastercard. On the Arrival Plus World Elite Mastercard, for example, you have 120 days from the purchase date to file a claim of up to $250 per item. You’re capped at $1,000 per year.
— Capital One: Like Barclays, Capital One price protection benefits depend on the card you have. The Capital One Platinum Mastercard, for instance, does offer price protection on eligible purchases within 60 days of the purchase date. Coverage is limited to $250 per claim with a maximum of four claims allowed per account annually.
— Chase: Chase is discontinuing the benefit on Aug. 26. Until then, Chase offers up to $500 per qualifying item, with a maximum of $2,500 in claims per year. For cash only, closeout, liquidation or going-out-of-business sales, you can claim up to $50 per item and $150 per year. You need to file your claim within 21 days of the price drop.
— Citi: The Price Rewind program offered by Citi tracks price changes over 60 days on items that have been registered and automatically issues reimbursements on qualifying purchases. Citi reimburses up to $200 per item, with an annual maximum of $1,000 per account.
— Discover: Discover cardholders can take advantage of the company’s price protection benefits within 90 days of a price change. Each eligible item purchased with your Discover card can be reimbursed up to $500. You are allowed a total of $2,500 in claims per account per year.
— U.S. Bank: The Cash 365 American Express card offered by U.S. Bank comes with a Best Value Guarantee — cardholders can receive reimbursement of the price difference on eligible purchases within 30 days.
How to File a Claim
If your credit card does offer price protection, it’s definitely a valuable benefit. Before you make your next big-ticket purchase, know the process for filing a claim. The exact steps will differ depending on your card issuer, but the process looks something like this:
Register your item. If your credit card company does the price tracking for you, you’ll need to officially register all eligible purchases made with the card first. This can be done online.
Sign up for a price tracker. There’s always a chance your credit card company’s price tracker might not find the lowest prices. It’s a good idea to sign up for a price-tracking app or website as well, such as Paribus or CamelCamelCamel. Tools like these can alert you to price drops on items you want to track.
Save the paperwork. You should hold on to receipts for all eligible purchases you’re tracking, including the credit card receipt and the itemized store receipt. If you do find that the same item is advertised for less elsewhere, save that advertisement and ensure it includes details such as the item name, date of advertisement, lower advertised price and the store name.
Contact your credit card company. It’s important to contact your credit card company as soon as you identify a price drop so you don’t miss the reimbursement window. You can either call the toll-free customer service number on the back of your card or log in to your account online and find a claim form there.
Fill out a claim form. Once you have the claim form, follow the instructions carefully and fill in all the necessary details. You should mail the form along with the itemized sales receipt, the card receipt that shows you made the purchase on the qualifying card, the advertisement of the lower price and any other details your credit card company requires. You should receive a reimbursement check within two to three weeks.
[Read: The Best Airline Credit Cards of 2018.]
Is Price Protection Worth It?
Even with the convenience of price-tracking tools, taking the time to submit a claim can seem like a cumbersome process. But if the price on a major purchase drops significantly, it can be well worth your time.
“Credit card price protection is certainly a nice feature to help avoid buyer’s remorse or feeling like you have been duped by paying too much,” says Vogt. However, to fully take advantage, you should be aware of the specific terms of your card’s policy and be familiar with the rules and limitations.
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How Credit Card Price Protection Works originally appeared on usnews.com
