How credit card purchase protection works (and the best cards for coverage)
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let's get started!Ever buy something new only for Murphy’s law to rear its ugly head and for the item to get damaged, lost, or stolen just a few days or weeks after you signed on the receipt? You might think you’re on your own, but several credit cards come with complimentary purchase protection that may cover some or all of the cost.
While credit cards often get the most attention for the rewards and sign-up bonuses they offer, the advantage of paying with plastic goes beyond just the ability to rack up points or cash back. And the added benefit of purchase protection is just one of the reasons why.
Here’s a breakdown of the facts about purchase protection, how it works, and a list of the best credit cards for coverage.
Best credit cards for purchase protection
Featured
National Bank World Elite Mastercard
Award-winning credit card in Travel, Mastercard and Insurance categories.
- Cash Bonus offer
BMO Cashback World Elite Mastercard
Welcome offer: Get up to 10% cash back in your first 3 months and the $120 annual fee waived in the first year
What is purchase protection?
Purchase protection (sometimes referred to as purchase assurance) is a complimentary benefit that insures newly-purchased items against incidents of theft, accidental damage, or loss. A successful claim can result in either the replacement, repair, or a reimbursement of the item’s purchase price.
While coverage is automatic and doesn’t cost extra, it does last for a limited period of time – usually up to 90 days from when you first purchased the item. Coverage amounts often hover around up to $1,000 per claim with maximum lifetime coverage of $60,000. Specific terms can vary by credit card, however.
It’s worth noting purchase protection isn’t the same as extended warranty insurance – which is also offered by many credit cards – as purchase protection is a form of short-term insurance that provides coverage relating to theft and loss versus, say, an inherent manufacturing issue, where an extended warranty claim may be more suitable.
While purchase protection is available on a wide variety of credit cards, including many with no annual fees, it isn’t universal to all cards and coverage can vary on the cards which do offer it. You’ll want to check the cardholder agreement of the particular card in your wallet to see if you’re eligible for coverage.
Basic rules and exclusions around purchase protection
Purchase protection, like any type of insurance, has some terms and exclusions. Before we dive into the details of how to file a claim, it’s worth getting acquainted with what exactly credit card purchase protection will and won’t cover.
What purchase protection will cover
- Newly-purchased items paid for in full using your credit card
- Recently-purchased items bought within the past 90 days (note: coverage periods may vary by card)
- Most non-perishable goods (think broken laptops or stolen smartphones)
- Coverage will kick in provided your account is in good standing and you’re making at least the minimum payment each and every monthly statement period
- Purchases made on your credit card anywhere in the world
- Items given as a gift (though, you as the cardholder must be the one who makes the claim)
- Items stolen from a vehicle or home (however, proof of forced entry is required)
What purchase protection won’t cover
- Cash or any form of currency including traveller’s cheques
- Pets
- Consumable or perishable goods (like bottles of wine or food)
- Concert tickets or services
- Golf balls or sporting equipment
- Any type of vehicle, electric or otherwise
- Used, pre-owned, or refurbished items
- Any items purchased for business or commercial reasons
- Natural wear and tear
- Jewellery and fur clothing stored in baggage (unless the bag was in your hand while stolen)
- Heating or cooling appliances
- Items redeemed for using points or cash back (may vary by card issuer)
- Damage stemming from infestation, pests, or flooding
- Inherit product deficits or mechanical issues (this is where extended warranty could be useful)
- One of a kind items
- Goods confiscated by the authorities
Depending on the particular card’s terms, purchase protection may not cover online purchases until the delivery is accepted by you or any items lost due to a “mysterious disappearance” (aka, there isn’t a clear explanation why the item was lost and no reason to assume theft was involved).
Note though, these are broadly-written terms and it never hurts to submit or inquire about a claim. You may be surprised to find your claim is approved and end up getting some money back.
How to submit a purchase protection claim
The claim submission process does vary from bank to bank. In some cases, you must first contact the card issuer over the phone and request for a claim form, while in other cases you can file a claim directly online.
When submitting a claim, time is of the essence. You should aim to submit a claim as soon as possible (often no more than 30 days from when the incident occurred). A claim must also be made before you pay for any repairs out of pocket.
As part of the claim process, you’ll often have to provide:
- A copy of the original receipt (detailing the cost, purchase date, and description of purchase)
- A description of the incident and where it occurred
- A copy of your credit card statement showing the purchase
- When applicable, a police/fire/loss-claim report
- When applicable, a photo of the damaged item
- When applicable, a written repair estimate
- Whether you have other relevant insurance protection that will cover the cost (e.g. tenant’s insurance)
Admittedly, reading through credit card purchase protection terms, collecting all the required documentation, and submitting claims can be slightly tedious. But that’s often the case when submitting any type of insurance claim, and if you’re successful, it can be well worth your time as you could potentially save several hundred dollars.
Best credit cards for purchase protection - details
based on spending $2,200/mo after $150 annual fee
- Earn rewards
1pt – 5pts / dollar earn rate
- Annual fee
$150
Perks
- Earn up to 5 points per dollar in eligible grocery and restaurant purchases*
- 2 points per dollar in eligible gas and electric vehicle charging purchases, recurring bill payments and À la carte travel (TM) purchases*
- 1 point per 1 dollar in other purchases
- Up to $150 each year in refund for travel expenses on airport parking fees, seat selection fees, baggage fees, airline ticket upgrades and access to airport lounges worldwide
- Free and unlimited access along with one (1) guest per cardholder to the National Bank Lounge at Montréal-Trudeau airport.
- Reassuring protection. Travel with peace of mind thanks to our comprehensive insurance coverage up to 60 days
- Out-of-province-of-residence medical/hospital insurance
- Departure flight delay insurance
- Baggage insurance in case of delay
- Baggages insurance in case of theft or loss
- Vehicle rental insurance
- Mobile devices insurance against theft or damages for a period of up to 2 years
- Medical, general and legal assistance
- Purchase protection in case of theft or damage*
- Extended Warranty*
- With the À la carte Rewards Plan® (the “À la carte Plan”), you earn points for every dollar on eligible purchases. These points may be exchanged for rewards such as merchandise, a travel package, a gift card, a travel discount, a donation, a financial product, repayment with rewards points or any other reward offered under the À la carte Plan
Features
Ratehub’s take
The National Bank World Elite Mastercard offers fantastic travel insurance coverage and features for seniors, making it a strong contender among travel credit cards. The trip insurance offers will save you money on your next vacation, plus, the strong points earnings you’ll get from the card could help you cover part or all of the cost of your next trip.
Pros
- Extensive travel insurance: Strong travel insurance, including extended emergency medical insurance coverage for seniors that will cover you for 15 days of travel plus trip cancellation or disruption and flight delay insurance, and more
- Travel expense refunds: Receive up to $150 each year in refunds for airport parking, seat selection, check-in fees, airline ticket upgrades and access to airport lounges worldwide
- Flexible redemption options: Combined with high, unlimited earn rates on essentials like groceries, gas and dining, this card also provides flexible redemption options on everything from travel through their A La Carte portal or redeeming for travel booked through any provider
Cons
- Annual fee: The $150 annual fee is slightly higher than average for this type of card
- Lounge access limitations: The complimentary lounge access only applies to Montreal airport
- Income requirement: The annual income requirement of $80,000 may be a barrier for some users
- Points values are fixed: Point values remain the same regardless of your destination, so it may take longer to accumulate points for longer flights. Plus, your points are worth less for anything other than booking travel through the A La Carte platform
Eligibility requirements
Minimum credit score: 760
Minimum income: $80,000/yr
Interest rates
Purchase interest: 20.99%
Cash advance: 22.49%
While purchase protection on most credit cards lasts for 90 days from the date you first purchased the item, the National Bank World Elite Mastercard’s coverage lasts for an impressive 180 days. In another major plus, the card triples the manufacturer’s warranty offering up to two additional years versus the standard one additional year provided by most other comparable cards.
The National Bank World Mastercard also offers similar purchase protection and extended warranty coverage, at a lower annual fee.
Also consider
Best for Everyday spending
based on spending $2,200/mo after $120 annual fee
- Earn rewards
1% – 10% earn rate
- Annual fee
$120 $0 first year waived
Perks
- Welcome offer: Get up to 10% cash back in your first 3 months and the $120 annual fee waived in the first year*
- Earn more cash back on the categories that mean the most:
– 5% on groceries*
– 4% on transit including ride sharing, taxis and public transportation*
– 3% on gas and electric vehicle charging*
– 2% on recurring bill payments like your monthly phone bill or favourite streaming service*
– 1% unlimited cashback on all other purchases* - Get the highest cash back earn rate on groceries in Canada.*
- Get valuable benefits and offers for digital everyday services from a variety of on-demand apps and subscription services
- Extended Warranty Plus*
- Purchase ProtectionPlus*
- Complimentary membership in Mastercard Airport Experiences provided by LoungeKey*
- Access over 1 million Wi-Fi hotspots around the world – all at no added cost, and no added fees or roaming charges*
- Complimentary Roadside Assistance Program*
- BMO CashBack World Elite Travel and Medical Protection*
- BMO Concierge Service*
- Unlock Mastercard Travel Rewards cashback offers when you travel and shop outside of Canada
- BMO is not responsible for maintaining the content on this site. Please click on the Apply now link for the most up to date information
- Cash Advance Interest 23.99% (21.99% for Quebec residents)
- The offer may vary in Quebec
Features
Eligibility requirements
Minimum credit score: 760
Minimum income: $80,000/yr
Interest rates
Purchase interest: 20.99%
Cash advance: 23.99%
In addition to offering between 5% to 1% on all your everyday purchases and complimentary roadside assistance coverage, the BMO CashBack World Elite provides 90 days in purchase protection coverage, as well as enhanced warranty protection that extends the manufacturer’s warranty for up to one year. BMO also makes redeeming your rewards extremely easy, as you can apply your cash back towards your balance any time of the year in increments of as little as $1.
Best for Everyday spending
based on spending $2,200/mo after $0 annual fee
- Earn rewards
1pt – 4pts / dollar earn rate
- Annual fee
$0
Perks
- This offer is not available for residents of Quebec.
- Earn 4 points†† for every $1 spent on eligible restaurant, grocery, digital media, membership and household utility purchases during the first 90 days, and 2 points‡ for every $1 spent on eligible purchases in those categories thereafter – in both cases, these earn rates apply until $10,000 is spent annually in the applicable category. 1 point‡ for every $1 spent on all other eligible purchases
- 5,000 bonus points†† ($25 in cash back value) after you make $500 or more in eligible purchases within the first 90 days of your account opening
- 5,000 bonus points††($25 in cash back value) once enrolled for paperless e-statements within the first 90 days of account opening
- Each year, you will receive Birthday Bonus Points‡ equal to 10% of the total number of Points earned in the 12 months before the month of your birthday, to a maximum Birthday Bonus each year of 10,000 Points
- Redeem points‡ for cash back, brand-name merchandise, gift cards from participating retailers, charitable donations, and travel.
- Standard Annual Interest Rates of 19.99% on purchases, 22.99% on balance transfers and 24.99% on cash advances
- Mobile Device Insurance***
- With Mobile Device Insurance, you’ve got up to $1,000 in coverage for eligible mobile devices in the event of loss, theft, accidental damage or mechanical breakdown
- No annual fee
Apply for the MBNA Rewards Platinum Plus® Mastercard®.
Features
Eligibility requirements
Minimum credit score: 660
Minimum income: N/A
Interest rates
Purchase interest: 19.99%
Cash advance: 24.99%
This no fee credit card manages to combine impressive rewards on everyday spending with standard purchase protection benefits. Purchase protection lasts for 90 days and has a lifetime limit of $60,000.
The MBNA Rewards Platinum Plus earns between 4 to 1 points per dollar on your everyday spending,
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