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Credit Cards and Holiday Shopping: Decoding Purchase, Return, Warranty and Price Protection

The Best Credit Cards for Holiday Shopping: Decoding Purchase, Return, Warranty and Price Protection
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If you’re like most people, you spend a lot more money — especially on presents, travel and food — between Thanksgiving and New Year’s than at other times of the year. The shopping environment itself is different too, from Black Friday door buster deals to post-Christmas clearance sales.

» MORE: How to Maximize Credit Card Rewards When Shopping

That’s why the holidays are a great time to familiarize yourself with the protections that your credit cards offer you all year round. These benefits could ensure that you pay the lowest price for a gift, receive a replacement for a broken toy or get an extended warranty on the latest must-have gadget.

Here’s what you should look for.

Price protection

It can be maddening to buy something at full price, or even on sale, and then see the same item elsewhere at a considerably lower price. Some credit cards offer a way out of that bind with price protection, a benefit that allows you to recover the difference if you find a lower price for the same item.

Return protection

Choosing gifts is an inexact science. It’s easy to buy your loved ones the wrong size or an item they already have. Credit cards that offer return protection often extend the amount of time you have to return an item, or allow you to recoup your money if the store has no return policy.

Purchase protection

Normally, if something you’ve bought is damaged or stolen, your only recourse is to file a claim with your homeowners or renters insurance policy. But such policies often have high deductibles that may be more than the item is worth. That’s why credit cards that offer coverage for broken or lost purchases can be a relief. If your purchase is stolen or damaged for a covered reason, you could be reimbursed the cost of the item, even if it was a gift.

Warranty extension

Extended warranties are pricey if you pay for them at the cash register. But sometimes they’re indispensible, like when you’re buying your child’s first laptop or buying a product that doesn’t tend to last very long. If you’re using a credit card that automatically extends the warranty on whatever you buy, you may not have to pay a separate charge. Your purchase’s warranty can be extended for up to a year.

The takeaway

Using a credit card for holiday shopping can be a win-win. Not only can you earn rewards and give yourself a few weeks of breathing room to pay for your purchases, you can also gain more protection for your purchases.

If your existing cards don’t come with the safeguards you need to protect your holiday purchases, it may be time to go shopping for a new credit card before you go shopping for stocking stuffers and Hanukkah gifts.

Virginia C. McGuire is a staff writer at NerdWallet, a personal finance website. Email: [email protected] Twitter: @vcmcguire.

Updated Nov. 13, 2015.

Image via iStock.