What Is Price Protection and Which Credit Cards Offer It?

What Is Price Protection?

As the name suggests, price protection covers you if the price of an item drops after you buy it with your credit card.

For example, if you purchase the latest model iPhone shortly before a new one is announced and the price drops once the newest model goes on sale, you may be able to get a refund for the difference through your credit card's price protection. The perk is typically valid for a set period after you made the purchase—say 60 or 90 days—and usually limits how much of a refund you can qualify for per claim.

Note that price protection isn't the same as purchase protection. The latter is a credit card benefit that provides coverage if an item you recently purchased with your card is stolen or damaged—again, within a certain period after you bought the item.

Who Offers Price Protection?

In the past, price protection was a mainstay among major credit cards. But recently, card issuers such as Chase and Citi have removed the benefit from some or all of their cards or decreased its value. This change coincided with the rise in services that automated the process, causing a spike in price protection claims for cardholders. With these services, a bot tracks your purchases and alerts you to price drops (some automatically file a claim), so you don't have to do it all manually.

But while price protection is no longer a given, it's still provided on some credit cards.

How to Use Credit Card Price Protection

Price protection can save you hundreds of dollars every year, but it's important to know what your card issuer requires to take advantage of the perk.

For starters, read the benefits guide for your credit card to understand what you need to file a claim, as well as the card's eligibility information and restrictions. You'll typically need the original receipt, billing statement showing the charge, and an original advertisement dated within the timeframe specified in the policy's terms.

You'll also need to file your claim within a certain number of days following the date of the advertisement.

Also, know what's covered and what isn't. It can vary by card, but some examples include cash-only and close-out sales, seasonal and discontinued items, motor vehicles, real estate, cellphone contracts and more.

One way to cut out some of the work is to sign up for a service like Sift or Earny. These apps can pull digital receipts from select retailers in your email inbox and compare prices, then file a claim on your behalf when they find a price drop. The service takes 25% of the reimbursement amount as payment, but that can be worth it if you don't want to deal with the hassle.

Alternatives to Credit Card Price Protection

Your credit card's price protection isn't the only way to ensure that you're getting the best available price. For example, Sift and Earny also take advantage of retailers' price protection policies.

So even if your credit card doesn't offer the perk, you can still register and get refunds on price drops if you qualify for price protection with the services' participating retailers.

Also, some retailers offer to match a competitor's price, which can come in handy if you prefer a certain retailer over another, but their price for an item isn't the best available. Some retailers will even price match an item from a competitor after you've bought it, as long as it's within the predetermined timeframe.

The downside to working with retailer price protection and price matching policies is that you have to do a lot of the legwork on your own, which can be challenging and time-consuming. So it's definitely worth considering signing up for an app that will do the work for you, even if it charges for doing so.

Focus on Credit Cards That Can Give You the Most Total Value

Credit card price protection can be a nice perk to have, but it's far from the only feature you should consider when picking a credit card. If you find a card that's a great fit and it happens to offer the perk, try to take advantage of it, especially on larger purchases.

But focus on credit cards that can give you the best total package, including the welcome offer, the rewards program and perks. Also, run the numbers if the card has an annual fee to make sure you're getting enough net value versus a card that doesn't charge an annual fee.

Missing out on price protection on your credit card can be a bummer. But as you shop around and compare rewards credit cards, remember that you can still get refunds on price drops through retailer policies, and with several price protection apps available, you don't even have to do anything to make it happen.