3 tips for using credit card price protection
You did your homework to find the best price for your new purchase only to see the price drop one month later. It's a frustrating situation, but if you paid with a credit card that has a price protection feature, you could get the difference back in your bank account.
With price protection, your card issuer credits you with the difference in price if a purchase you bought on your card shows up at a lower price within a certain time frame. It's an often overlooked feature.
"Price protection is a free benefit that some credit card issuers offer. It doesn't cost you anything, but sometimes it can save you a substantial amount of money if you find yourself in a situation where the price drops soon after you make a purchase," says Joe Ridout, manager of consumer services at Consumer Action, a nonprofit advocacy group dedicated to consumer affairs.
"I don't think most consumers are aware of the extent of this perk. It's something to take advantage of so you aren't wasting your time obsessing over small price drops," Ridout says.
Citi, Capital One, Chase, MasterCard and Discover all have price protection programs. If you're an American Express user, you're out of luck for now. AmEx had a program called Best Value Guarantee, but a spokeswoman confirmed to CreditCards.com that it's been phased out. "At this moment, we don't have plans to reintroduce it, but we continuously review our products and services to understand what our card members value most," Jane Di Leo said in an emailed response to questions.
How price protection works
Each program has its own process and set of responsibilities for the consumer. Citi's Price Rewind, for example, is online-based. You register your purchase on the website, submitting your original receipts and credit card statements online. The service then scans the Internet for a lower price for your item. If it finds one, you get a refund of the price difference.
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For more information about price protection and other credit card purchase benefits, such as extended warranty offers and return guarantees, see "Purchase protection survey 2016: Which cards offer them."
Capital One, Chase, MasterCard and Discover all require a bit more initiative to use their programs. You'll need to call a customer care line to launch a claim. A form will then be mailed to you and you must fill it out and send it, along with receipts, advertisements and credit card statements, to a claims department within an allotted period of time.
The key difference between the two methods is that Citi does all of the price research for you, says Holly Johnson, a personal finance writer and founder of the blog, Club Thrifty. That doesn't mean the other programs aren't worth the hassle. "Your savings could be in the hundreds for an extra hour of work. so that's a huge payoff for very little effort," she says.
To help keep on top of prices on your own, Ridout suggests websites such as trackif.com, camelcamelcamel.com and getinvisiblehand.com. They monitor prices, provide alerts about lower prices and even record the price history of an item.
Citi's seamless program
The process is more seamless with Citi. Daniel M. Clark, a 40-year-old Houston father and Citi cardholder, found out about the bank's program after he spent nearly $1,700 on a new iMac desktop for his wife.
"Shortly after I made the purchase, out of the blue Citi emailed me and said it noticed I used my card to buy a laptop and that it'd look for a lower price and pay me out for the difference," he says.
He had to register his purchase before the program could start searching for a price drop, but soon after that he got notice that the program had found a cheaper price. He uploaded a copy of his Apple Store receipt and within 30 days, a $120 check was in the mail. "It was very surprising because here is a company that for no good reason I can see decided to give me $120," Clark says.
With that experience in mind, he plans on using the card more often when buying appliances, gardening supplies and household tools.
In another case, Long Island, New York, resident Robert Ottone received a $20 credit to his Citi credit card after he used the program on a few DVD purchases. Because there is no minimum amount to start a claim and the program searched for better prices for him, all he had to do was register his purchases and then claim the difference.
"You're going through all of your purchases on your card so it's not the shortest amount of time but it's easy to do and it's free money," he says.
"It gives you a list of recent purchases like a statement, you click on an item you bought, like a laptop, to register and it finds you a cheaper price," Ottone explains.
Citi spokeswoman Emily Collins says that any cardholder whose card offers the feature (see below for a list of eligible Citi cards) can take advantage of the Price Rewind program. Sometimes, the credit card issuer will email consumers if it notices a big purchase or pattern in spending, as it did in Clark's and Ottone's cases. Either way, you'll need to register the product for the price protection to kick in.
How to use price protection
There are a few factors to keep in mind to become a savvy user of the price protection program your credit card issues:
1. Use the perk for big purchases.
Club Thrifty's Johnson suggests that the best use for price protection programs is for appliances and furniture. When she moved into her new home, she made sure to take advantage of this perk as insurance for her purchases.
Concentrating on big-ticket items is especially relevant for the programs that force consumers to do all of the legwork. You may find it's only worth spending time researching prices if the savings are at least double-digit. "It might not matter for a $20 T-shirt but an $800 fridge could save you $100," says Johnson.
Ridout says cameras, televisions and computers are all good candidates for price protection programs, too. "These things have two things in common: They tend to be quite expensive and they are likely candidates for price drops once a new model comes out and the technology loses its cutting edge," he explains.
2. Read the fine print.
Understand the terms and conditions of the program before you make a purchase and rely on the price protection to bail you out if the item's price fluctuates. "It's best to read the fine print and know what the rules are because the devil's always in the details," Johnson says.
In particular, look out for:
- Exclusions. There are some similarities that all of
the programs share. In order to be eligible, a purchase must be made in the
United States and paid for by your credit card or its reward points. Perishable
items such as food and plants aren't included, nor are travel purchases,
traveler's checks, jewelry, art, antiques and collectibles, refurbished and
personalized items, and motorized vehicles and equipment.
Then it gets tricky. Some creditors name items bought at auctions, such as eBay, as off limits. Others exclude "limited quantity," "going out of business," "close out" or "discontinued" sales, and purchases made with rebates, manufacturer's coupons and special financing. Be especially careful of this around the holidays. Some Black Friday ads, for example, may promote products as "limited quantity," which could mean any price drops won't be honored.
- Claim limits. Most programs carry claim limits per purchase and annual claim limits. The good news is, if you've got multiple cards from one issuer, you may also be able to take advantage of multiple claim limits. "One may have multiple cards with price protection, all of which would have their own annual limits," Amanda Landers, a spokeswoman for Capital One, explained in an emailed response to questions. "The annual limits ... are per credit card account, not per person."
- Deadlines. Pay attention to rules stating when you must start your claim after you make your purchase. Discover and Chase both offer a 90-day window after your purchase to find a price drop, while Citi, MasterCard and Capital One offer 60 days.
3. Gather your evidence.
You will need proof you used your card to purchase the item in question at a particular price. Johnson suggests keeping original receipts in a safe place because they're crucial to making a successful claim. While credit card statements can often be easily retrieved online, a paper receipt is much more flimsy so you'll need to take more care with it. Take note of the kinds of evidence required to prove a lower price is available. Some programs accept print advertisements only, while others are open to online ads, too. Throughout Chase's terms and conditions, it refers solely to "printed advertisements" as proof of a lower price, but a spokesman says that online advertisements also apply.
Ads may need to clearly state the date, the product information and the retailer's details. In lieu of an ad, Discover allows cardholders to submit a written statement, signed by the store manager on store stationary, documenting the lower price for the identical item.
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