August 22nd, 2013
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There’s always going to be debate on which card to use and when.
Should you grab the 2.2% cold hard cash you can get on all purchases from the Barclaycard Arrival or should you try to maximize spending by using Chase Ink Plus, Chase Ink Bold, or Chase Ink Cash to earn 5 points per dollar via gift cards from office supply stores.
Should you accumulate Starpoints via Starwood Consumer or Starwood Business, Chase Ultimate Rewards points via Sapphire Preferred and Freedom, or American Express Membership Rewards points via Premier Rewards Gold or Business Gold Rewards. They all offer different category bonuses and very different airline transfer options. It gives most people a headache just trying to figure it all out. I took a stab at it in this post though I’m afraid it made things even more confusing for some.
But besides for category bonuses, threshold bonuses, and how you personally value and use each currency it’s important to keep in mind the protections that your cards offer and that’s really where American Express shines. There’s no good way to quantify whether you should earn 5 points per dollar on Amazon for that laptop via Ink gift cards or if you should use your Starwood card for the 1 Starpoint per dollar plus warranty protections but it is something that you should bear in mind when making any kind of significant or risky purchase.
While many other banks offer some of these protections nobody makes it as pain-free as American Express does. Not even by a long shot.
Best of all? Even if you close the American Express card on which you bought the item as long as you have any open card you can still file a claim!
Return Protection: This allows you to return items up to $300 to American Express within 90 days if the merchant won’t take the item back. You can use this up to $1,000 annually per card. (Yes, if you buy something like the Bose QC3s on sale for $314 you can still make a return claim within 90 days, you would just lose the $14 overage)
I’ve used this extensively with retailers that have 30 day, 14 day, or even non-existent return policies. You just file a claim online to get it started.
It’s really hassle-free and it’s totally underrated by most people. If the item is under $100 typically you will just receive a refund within a few days without even having to fax in any receipts or even having to return the item!
Recently Vente-Privee had a “summer camp” sale where they offered thousands of items per day at massive discounts, with the caveat that everything was final sale. When several of the items didn’t work out I didn’t even sweat it as I purchased them on my Starwood card. Within a few days they were all refunded and I donated the clothes to a clothing bank as American Express didn’t even ask for them back.
Extended Warranty: This matches the manufacturer’s warranty up to an extra year of warranty coverage on items up to $10,000. It does not extend warranties that aren’t from the item’s manufacturer.
The irony here is that most manufacturer’s warranties stink. They make you send in your item and typically have long turn-around times. Or they find reasons why the warranty doesn’t cover your problem.
Wait it out until the manufacturer’s warranty ends and you’ll be in luck. Often times you’ll receive a refund of your entire purchase price within a few days of making a claim without even hassling you at all. DDF members report this happening often for cameras, cell phones, and computers. For some more expensive items they may ask for a repair quote but when you send in the quote you’ll typically be credited with that amount (up to the purchase price paid) within a few days. People on DDF have even reported getting refunded for computers with cracked screens and other physical damage during the AMEX warranty bonus year, something that the manufacturer would never cover.
I just shake my head when I see people paying for a 2nd year warranty at a store. Your AMEX will do that far better and it’s free!
Purchase Protection: This covers items that break or get stolen within 90 days of purchase.
On most cards you’re covered for items up to $1,000 but if you use your Platinum card it covers items up to $10,000. If you use your Platinum card it will even cover you for items that you just lose!
Dispute Resolution: If you have a problem with a defective item or a bad merchant then American Express makes it easier than anyone to get your money back. You can file a claim online and often that will be the end of it, your money will be returned. I’ve had to file disputes with other banks and I rarely seem to win, even when I’m 100% in the right. With American Express they will fight for you like nobody else.
When I bought a GPS in Isrrael in 2007 that was completely defective, Office Depot in Jerusalem refused to take it back even though I was within the stated return policy. I filed a dispute and got the money back without a fight.
I paid for an introductory scuba diving course in Hawaii in 2009 and they stuck us with diving experts who were being certified for a new depth that day. When I wasn’t ready to jump in the water and go down dozens of feet right away they made us wait on dry land and refused any refund. Some intro course, ever heard of easing people in? Luckily I paid with my AMEX and I’m sure you know how the story ends
Can Rental Insurance: This is one place I don’t use American Express. Instead you should use a United Explorer card as it gives free primary car rental insurance in most countries in the world except Israel. This coverage is only secondary with most cards including American Express (meaning in case of damage you would have to file a claim with your personal car insurer) unless you pay a $20-$25 per rental fee. American Express also does not cover rental cars in Israel. Over there the ideal card to use is a Chase Sapphire Preferred World Mastercard which covers Israel with no foreign exchange fees and offers 2.14 points per dollar on all travel items. If you have a Chase Sapphire Preferred Visa you can still call up Chase to have it changed over to a Sapphire Preferred World Mastercard.
More reasons I love American Express?
1. They post an opening date for your cards of when you got your first AMEX card. That means that every time you open an AMEX you are instantly improving your FICO score as you are greatly increasing your average account age. (And even when you close a card it still helps average account age for at least 10 more years). Check your report for free at annualcreditreport.com to see for yourself.
2. Typically just 1 pull to get consumer and business cards on the same day.
3. Twitter promotions!
4. Small Business Saturday. Need I say more
Share your experiences with purchase protections and American Express in the comments!