DEFINITION of 'Price Protection'

Price protection is a little-known but common feature offered by most credit card companies that allows cardholders to receive a refund if an item bought with that credit card drops in price within a specified time period. This time period is usually within 30 or 60 days though some cards allow claims to be filed within 90 days.

BREAKING DOWN 'Price Protection'

To receive the refund, you must file a claim with the credit card company whose card you used to buy the item. You must also prove the new, lower price. For example, you can prove the new price by providing a printed advertisement showing the same item and the lower price. Each credit card company will have slightly different program stipulations. There may be a refund limit per item as well as a refund limit per year (such as $250 per item and $1,000 per year).

Some credit cards exclude internet purchases from their price protection offers. Furthermore, the lower price that is being used for comparison often times cannot be from an internet auction, where pricing might start low but change drastically before the buyer has a reasonable chance to purchase the item.

How Price Protection Can Vary Among Credit Card Companies

There might be specially allowances instituted on specific types of lower prices that other companies might not honor. For example, a credit card company might offer price protection refunds if the item is found at a discounted price at closeout, liquidation or going-out of-business sales, though the amount could be much smaller, with maximums of $50 per claim and up to $150 per year, compared with other refunds.

Price protection is not always an automatic service, even from creditors who offer it. It may be necessary for the cardholder to register items that would be under the service in order to let the company monitor for price changes that would warrant a refund. In such instances, the credit card company would search the internet for possible lower prices and then issue refunds where warranted. Conversely, the credit card company might automatically highlight “big ticket” purchases that would be potentially good candidates for the price protection program. From the credit card company’s perspective, this service may encourage consumers to use their cards more regularly, as there is the increased potentially to get a refund through the company as they make more purchases.

Not all credit card companies offer price protection, and those that do might only allow it for specific cards they offer or for particular types of purchases.

  1. Return Protection

    Return protection is a credit card perk that, under certain conditions, ...
  2. Credit Card Funding

    Credit card funding is the use of a credit card account to provide ...
  3. Business Credit Card

    A business credit card is a credit card intended for use by a ...
  4. Credit Card Balance

    Credit card balance is the amount of charges, or lack thereof, ...
  5. Purchase Rate

    The purchase rate is the interest rate applied to purchases made ...
  6. Refund

    A refund is a payment from the state or federal government for ...
Related Articles
  1. Personal Finance

    Credit Card or Cash: Which To Use?

    Credit cards are more convenient to use than cash, but they're not always the best choice. Here is why you should and shouldn't pay with a credit card.
  2. Personal Finance

    Purchases You Should Always Make With A Credit Card

    Credit cards aren't always bad possessions to have. There are certain perks associated with using credit cards as we make routine or irregular purchases.
  3. Small Business

    How to Use Small Business Credit Cards

    A small business credit card can be a convenient way to increase your company's purchasing power, enabling access to a revolving line of credit.
  4. Investing

    Investing in Credit Card Companies

    Find out why investing in credit card companies requires keeping an eye on consumer indexes and the overall health of the economy.
  5. Personal Finance

    10 Considerations For Using Your Credit Card Abroad

    Credit cards can be the best item you pack when traveling, just make sure that you are taking the right card that suits your needs.
  6. Personal Finance

    Best Credit Cards For People With Poor Credit Scores

    There are still ways you can build credit with a credit card, even if you have bad credit.
  7. Personal Finance

    Credit Cards For People With Bad Credit

    Yes, you can get a credit card and start repairing your credit history. But brace yourself for low credit limits, sky-high interest and staggering fees.
  1. What are some examples of common credit card reward program benefits?

    Learn about different benefits available to credit card holders including cash back, air travel miles, introductory rates, ... Read Answer >>
  2. Debit card versus credit card

    Can't figure out which card to use when making a purchase decision? Here is everything you need to know about the differences ... Read Answer >>
  3. Can the Best Buy credit card be used anywhere?

    Learn how the Best Buy credit card can only be used in Best Buy stores and online to make purchases through the Best Buy ... Read Answer >>
Trading Center