Are Credit Cards With Price Protection Worth It?

Are Credit Cards With Price Protection Worth It? Photo (cc) by StockMonkeys.com

More than half of consumer credit cards now offer price protection, but which one to get — if you should even get one at all — can be tricky.

A new analysis by the credit card comparison site CardHub.com found that 53 percent of consumer credit cards (excluding co-branded, student and business cards) have a price-protection program, compared with 49 percent last year.

These programs enable cardholders to receive a refund if they purchase an item and its price drops within a certain period of time. The terms of price-protection policies vary from issuer to issuer and card to card, however.

For example, CardHub’s analysis found that:

  • Price-protection policies work similarly for most issuers, meaning consumers are required to notify the issuer of a price drop and provide proof of purchase and proof that a lower price became available elsewhere. But one issuer (Citi) offers automatic price monitoring to customers who proactively register items.
  • Most policies provide protection for 60 days after purchase, but the policies of some cards provide protection for as much as 120 days.
  • Seventeen percent of cards limit the number of price-drop claims a cardholder can submit per year to as few as four claims.
  • Jewelry is the item to which price-protection policies most commonly do not apply.

Due to such variations, Roger Beahm, a marketing professor at the Wake Forest University School of Business, tells CardHub that leveraging a price-protection policy isn’t necessarily worth a cardholder’s effort:

“[It] depends on three things: (a) the price you paid for the item you bought, (b) the amount of money to be gained by exercising the policy and (c) how much you value your time. … You don’t want to become too preoccupied in monitoring [prices after a purchase].

The top 10 issuers or cards in CardHub’s analysis are:

  • All Chase cards — total score of 87 percent
  • All Discover cards — 84 percent
  • USAA American Express — 78 percent
  • USAA MasterCard – 78 percent
  • All Barclaycard cards — 78 percent
  • All Citi cards — 72 percent
  • Wells Fargo Cash Back — 71 percent
  • Wells Fargo Home Rebate — 71 percent
  • Wells Fargo Visa — 71 percent
  • Wells Fargo Rewards — 69 percent

For the complete list, click on the CardHub link above.

For help finding the perfect credit card, visit our Solutions Center.

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