Do Cashback Cards Offer Purchase Protection?
Credit cards that offer cashback rewards provide great savings on spending. But cashback cards differ on whether they also include purchase protection as an added benefit. Understanding available protections helps maximize the value of using cashback cards.
What is Purchase Protection?
Purchase protection provides reimbursement if eligible items purchased with the card are damaged, stolen, or lost within a specified period. Typical coverage includes:
- Up to 90-120 days of purchase protection from the charge date
- Covers new items stolen from home or damaged accidentally
- Provides reimbursement up to $500 per claim and $50,000 per year
- Simple claim process with minimal documentation
This provides peace of mind on major purchases against common issues.
How Purchase Protection Differs from Insurance
While complementing insurance, purchase protections have key differences:
- Covers an individual purchase transaction rather than blanket policy
- Temporary short-term coverage for a few months
- Lower claim limits like $500 max per incident
- Requires using an eligible credit card for the purchase
It provides an added limited layer of protection on top of standard insurance.
Do Cashback Cards Offer Purchase Protection?
Cashback reward cards range in whether they include purchase protection:
- Many basic no-fee cashback cards do NOT include protections
- Premium travel and rewards cards typically offer better protections
- Cards with annual fees are more likely to provide protections
Check your card’s specific benefits guide to confirm coverage. Don’t assume protections are included.
Cashback Cards With Purchase Protection
Examples of popular cashback cards that DO offer purchase protection:
- Chase Freedom cards – 120 day coverage up to $500 per claim
- Citi Custom Cash Card – 90 day protection up to $500 per incident
- U.S. Bank Cash+ Visa – 120 days of coverage up to $500 limit
- Wells Fargo Cash Wise Card – 90 days coverage with $1,000 per case cap
Confirm coverage matches your expected purchase protection needs when comparing cards.
Cashback Cards Without Protections
Many cashback cards do not include any purchase protection, such as:
- Capital One Savor Rewards Cards
- Bank of America Customized Cash Rewards
- TD Bank Cash Card
- State Farm Cash Rewards Visa
- PenFed Power Cash Rewards Visa
Don’t assume protections come standard. Verify coverage specifically on cashback card terms.
Benefits of Purchase Protection
Key advantages that purchase protection offers:
- Coverage for theft, damage, or loss soon after major purchases
- Peace of mind shopping online, carrying new items, gifting valuables
- Potentially lower claim deductible than home/renters insurance
- Simple claims process online or through card issuer
- May cover ineligible items not under standard insurance
The savings on a single protected loss often offsets annual fee costs.
Limitations of Purchase Protection
While valuable, purchase protection does have restrictions:
- Limited coverage windows of just 90-120 days
- Low maximum claim limits like $500 per incident
- Excluded items like cars, collectibles, antiques
- Requires using eligible card for entire purchase amount
- Denied if protections not verified and documented
Review full coverage terms to avoid surprises on restrictions.
Alternatives to Purchase Protection
Other options beyond credit card protections:
- Buy additional warranty coverage from retailers
- Insure valuables separately through homeowners or renters policies
- Only use credit cards offering generous return policies
- Opt for premium cards with the highest coverage limits
- File claims under existing insurance first before trying protections
Weigh alternatives to determine the most suitable coverage.
Do You Need Purchase Protection?
Assess if purchase protection benefits your card usage with these questions:
- Do you make large high-value purchases frequently?
- Have you experienced theft, damage, or loss of expensive items before?
- Do you carry valuables away from home regularly that may be at risk?
- Does your lifestyle involve activities that put belongings at risk?
- Would you travel or shop online more if purchases had added protections?
For moderate spending mainly on essentials, protections may provide less value.
Key Takeaways on Purchase Protections
- Review your card’s benefits guide to check if purchase protection is specifically included
- Compare protection claim limits and duration across different cards
- File insurance claims first then use protections for any gaps
- Don’t assume protections are part of all cashback rewards cards
- Evaluate if this benefit is worth paying annual fees for your spending habits
While not guaranteed, purchase protection can provide substantial added value from cashback reward credit card spending for certain user profiles.