Purchase Protection: Shopping with Credit and Prepaid Debit Cards
Zero-liability purchase protection on credit cards is required by the law and is merely offered as part of company policy on prepaid debit card purchases.
Prepaid debit cards have gained popularity and are widely used for daily purchases. But some experts still recommend using credit for buying large items, their argument is the following. Purchase protection on credit cards is the law. Fair Credit Billing Act ensures zero liability for poor-quality or damaged products, undelivered goods and unauthorized purchases. Isn’t this great? Let’s look at it.
Purchase protection offered by leading credit card companies like Visa, MasterCard and American Express for exceed limits required by the federal law. Visa purchase protection policy on some of their products (for details see terms and conditions of a particular card) will replace, repair, or reimburse you for eligible items of personal property up to the amount of $500 per occurrence within 90 days from the date of purchase. Covered reasons include theft, damage due to fire, vandalism, accidentally discharged water, or certain weather conditions. Visa protects even purchases made outside of U.S. MasterCard shopping protection includes extended warranty on your purchases for up to one year, offers reimbursement if you were to find a lower price on a purchased item, coverage in the event an item is damaged or stolen, and a refund for up to $250 if you were to become dissatisfied with the product within 60 days of the purchase. American Express provides protection on eligible purchases against theft of accidental damage for the same 90 days from the date an item was purchased and includes coverage for items bought in other countries as well. Repairs, replacements and reimbursements can be up to $1,000 per claim.
So, with credit cards you can even withhold or return your payment if you were dissatisfied with the quality of goods you purchased. But sometimes there are limitations like the item cost must be more than $50 and the purchase must have been made in your home state or within 100 miles of your home address.
Today debit cards today enjoy better protection than ever. Visa and MasterCard prepaid reloadable cards are protected against fraudulent charges. You can shop with confidence knowing that all transactions made over their networks are protected. Card issuers are requested to comply with this policy unless they can prove cardholder’s negligence. But the usual practice is that cardholder protection policy of credit card companies requires issuers to extend provisional credit for losses from fraudulent transactions within 5 business days of notification of the suffered damage. Then again with reloadable cards this is just a policy, not a law.
But you do need to know terms of purchase protection policy of your card and be aware of all limitations. Make sure you understand the difference between your billing rights and dissatisfaction with goods or services. If you don’t know the rules, disputing charges with the bank will be challenging. If you own a prepaid debit card, contact your bank also to find out about protection offered on both signature and PIN transactions.
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