Everything you need to know about credit card price protection

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Don’t you hate that feeling when you see a great sale on an item you already bought? It doesn’t feel right, or even practical to return your purchase and buy it again somewhere else at the lower price, but there is an alternative: Credit card price protection policies can offer you a refund when an item that you purchased is advertised for a lower price.

Let’s take a look at some of these policies, and find out how you can use them to save money.

How credit card price protection policies work

Although each credit card issuer has a different policy, all of these benefits have a one thing in common: lots of terms and conditions.

Here are the important ones that you need to know about:

  1. The types of purchases it covers. Each price protection policy will exclude some types of purchases, such as services, perishable items, jewelry and motor vehicles and their parts. But thankfully, these policies typically include the items most likely to go down in price over time, such as computers, mobile phones and other electronics.
  1. The time period you are covered. These policies are not meant to provide you a benefit if something ever goes on sale, just when a lower price is found within a few months. Most of these policies will cover you for 60 days, but some can last as long as 120 days.
  1. Coverage limits. These policies will have a maximum benefit per covered item, usually between $250 and $500. There’s also an annual maximum that you can receive, typically between $1,000 and $2,500.
  1. The claims process. Most of these policies require you to submit a claim online or in writing when you find a lower price, including a receipt for your purchase, your credit card statement and a qualifying advertisement for the exact item at a lower price. Some ads may be excluded or have limited benefits, such as those for going-out-of-business sales, used items and auctions The exception is Citi’s Price Rewind service, which will automatically refund the price difference if it finds a lower price on a covered item.

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Examples of some credit card price protection policies:

Capital One Mastercards

Capital One cards that are part of the Mastercard payment network receive a valuable price protection benefit that covers your purchases for 120 days. Ironically, this includes many of their entry-level cards like their QuicksilverOne and Secured cards, but excludes some of their premium products, such as their Venture rewards card. This policy has a maximum coverage of $250 per item and you’re limited to four claims per calendar year. It also doesn’t cover items advertised as “limited quantity”, “going out-of-business sales”, “close out”, or as “discontinued.”

Citi Price Rewind

This innovative program is available on all Citi cards including the Costco Anywhere card, the Citi Double Cash and the Citi Simplicity. Unlike other price protection plans, this one will search the Internet for a lower price, and automatically issue you a refund when one is found. However, you have to take the extra step to register your purchases in advance, as Citi has no way of knowing what you bought and how much you paid for it (it can only tell the merchant you made a charge to and the total amount of all of your purchases). You can also submit a claim manually if you find a lower price that this program missed. This policy covers your eligible purchases for 60 days, and has a limit of $500 per item. There’s also a limit of $2,500 per year in refunds.

RELATED: Should I always use my Costco credit card at Costco?


How to get the most benefit from these policies

First, you need to be aware of which credit cards you have that offer these policies, and what their terms are. The easiest way to find this out is to look through a pamphlet that came with your card called the Guide to Benefits. But if you threw it away when you got your card, don’t worry — these guides are often available online, and your card issuer should be happy to mail you a copy if you ask them.

Next, you need to track your major purchases, save your receipts and create a reminder to look for a lower price before the policy expires. And if you used a Citi card, all you really have to do is register your major purchases at the Price Rewind site.

Also, you can try to take credit card price protection policies into account when you make a major purchase. For example, you might buy something when and where it’s convenient for you, rather than wait for a sale and drive across town. And instead of shopping just on price, you might choose to buy from a store that has the best service and selection, or the most convenient location.

Finally, remember that a credit card’s price protection programs can be valuable, but it’s never worth going into debt just to receive this benefit. A credit card is best used when you can avoid interest by paying off your balance in full. If you will end up paying interest on your charges, it’s best to use a debit card or cash instead.

My experience

Last year, I bought a television from Costco using the Costco Anywhere Visa from Citi. Knowing that these items go on sale frequently, I registered it with Citi’s Price Rewind service, which only took a few minutes. Sure enough, I received a refund of about $60 the next month when it went on sale at a different store.

By understanding how these credit card price protection policies work, you can receive value from a credit card benefit that you might not know that you had.

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