Price and purchase protection: credit card features to know about

Co-author: Dominic Beattie

When choosing a credit card, you’re probably thinking about whether the card comes with a rewards program, or whether the provider offers protection against fraud. But there are two little-known features that are worth considering, and could save you some money when things turn pear-shaped.

Many credit cards offer features known as price protection insurance and purchase protection insurance, which provide financial coverage for customers.

What is price protection insurance?

Most of us have been in the situation where we’ve made an ‘impulse buy’ from a particular store before discovering that there was another store down the road selling the same item at a much lower price,  or after some time, the same store you bought from has drastically lowered their price for that item.

This happens far too often for many of us, but usually, we just say “c’est la vie” and assume there is nothing we can do about it.

That’s where Price Protection Insurance steps in. This feature allows you to seek a refund for this price difference.

Also called a Guaranteed Pricing Scheme or even Shoppers Cover, Price Protection Insurance covers consumers against the risk of being ripped off.

For example, you might have been caught up in the excitement surrounding the release of a new piece of technology and rushed in and bought that item on your credit card for, say, $500.

Some time later, when the initial excitement has died down, retailers are now selling that item for a drastically lower price of $300. Thankfully, your credit card has price protection, so you obtain proof of this price difference and claim a refund of $200.

The conditions of this feature can vary a lot. For some credit cards, the price drop has to be via the same retailer (but can be in a different location), but others might allow it to be from any store so long as they’re within a specified distance (usually 25 km) from each other. Also, the time limit to make this claim can range significantly, so make sure you check the terms and conditions on your card! Price protection can be a complimentary feature for some credit cards, but it may be an optional extra for other cards.

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Here are some personal credit cards offering this feature (at the time of writing) and a brief overview of the different conditions attached to each. Please note that terms, conditions and exclusions will apply to all programs:

Credit Card

BNZ Advantage Visa Platinum

OneCard Visa

Gem Visa

Policy Name PriceGuard Shopper’s Protection Shopper’s Protection
Min Price Difference No minimum price difference, but the minimum purchase amount is $150. $10 $10
Max Refund Up to $1,000 per occurrence with a maximum of $5,000 per BNZ Platinum Card per policy period. Each item is covered up to $600 and OneCard will pay a maximum of $2,000 for all items in any 12-month period. Each item is covered up to $600 and Gem will pay a maximum of $2,000 for all items in any 12-month period.
Same retailer only? No Yes Yes
Policy Cost Complimentary 1% of the monthly closing balance. Max monthly premium of $50. 1% of the monthly closing balance. Max monthly premium of $50.
Time Limit The advertisement of the lower price must be published within 30 days of your purchase, and you must contact BNZ within 14 days from the advertisement’s publication. 6 months 6 months
Source: Providers’ websites

Each card will have particular terms and conditions regarding which items are eligible and what evidence is necessary to prove this price difference, so be sure to thoroughly read the product disclosure statements thoroughly.

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What is Purchase Protection Insurance?

Purchase Protection Insurance, also called Purchase Security Insurance or Merchandise Protection, is insurance for the new products you buy with your credit card. It provides coverage for the items against loss, theft, or accidental damage, usually for up to 6 months from the time of purchase.

For example, if you drop a new phone you bought outright on your credit card and it breaks (and it’s not covered by a warranty or repair), with purchase protection you could make a claim for the amount you paid for that phone so you can buy a new one.

As with price protection insurance, the conditions regarding purchase protection will vary among the different credit card providers. This includes annual payout limits and limited payouts per item, as well as the length of time after purchase the items are insured for.

At the time of writing, more than credit cards on Canstar’s database state that they offer some form of purchase protection insurance:

Company Product
American Express Airpoints Platinum Card
Platinum Card
BNZ BNZ Advantage Visa Platinum
Onecard Onecard Visa
Gem Gem Visa
Westpac
Airpoints Platinum Mastercard
Airpoints World Mastercard
hotpoints Platinum Mastercard
hotpoints World Mastercard

There are additional conditions that may apply, such as payout limits per item and excesses you might have to pay. Some credit cards offer coverage for items purchased outside of New Zealand while others might not. Be sure to read the product disclosure statements thoroughly.

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