Credit Card Protection on Purchases

Coverage is calculated based on the original date of purchase.

Lenders typically offer credit card holders purchase protection insurance for two reasons. First, the lender wants to remain competitive in the credit card market. Second, the lender wants to provide peace of mind to credit card holders who rely on their cards for high-ticket items and daily purchases.

Identification

While credit card purchase protection insurance varies, most issuers cover credit card purchases made against theft, fraud and loss, according to the Find Credit website. Restrictions apply, however. For example, a minimum dollar amount may be imposed before coverage is effective. This dollar amount can be as low as $50 to $100.

Legal Considerations

The Fair Credit Billing Act (FCBA) allows a consumer to withhold payment on any good that is defective at the time of purchase. Consumers are granted a three-day grace period when purchasing big ticket items that require collateral, according to the Truth in Lending Act.

Requirements

Credit card companies require consumers to make a concerted effort to reach a solution with a merchant before requesting a refund. If a merchant refuses to replace a damaged good or refund a service, the card holder can then request a refund.

Prevention/Solution

You must contact your credit card issuer to obtain a dispute form if you cannot download one from your card issuer's website. You have 60 days from the date the defective good or unsatisfactory service appears on your billing statement to submit a formal dispute with your credit card company. Provide supporting documents such as receipts or written correspondence from the merchant with your dispute form.

Warning

If your credit card becomes lost, stolen or damaged, report the incident to your credit card company immediately. Place a fraud alert on your credit report by contacting one of the three credit reporting bureaus.

References

• Find Credit: Credit Card Purchase Protection
• Chase VISA: Payment Protector Plan
• Federal Trade Commission: Recover From Identity Theft
• CNN Money: Can You Stop Payment on a Credit Card Charge
• Fair Debt Collection: Credit Card Payments Under the Fair Credit Act
• Fair Trade Commission: Fair Credit Billing

Resources

• Federal Trade Commission: How to Dispute a Charge