Free purchase protection worth £1,533 on the cards

Millions of Christmas shoppers will be entitled to free insurance worth on average £1,533 in payouts if they buy their gifts with a credit card.

New analysis from MoneyExpert.com has revealed that over half the credit cards on the UK market automatically insure new purchases against loss, theft or accidental damage.

However, the independent financial comparison website is warning credit card holders not to assume that their Christmas gifts are covered by their plastic as many of the top credit card providers do not include purchase protection as standard.

Purchase protection covers consumers against the loss, theft or accidental damage of newly purchased goods for a specified period, often around 90 days. It gives shoppers the chance to replace purchases that are stolen or broken and are not covered by other insurance policies. According to MoneyExpert.com, 57 per cent of all credit cards include automatic purchase protection.

And for those relying on their plastic, the good news is that the average person will fork out around £1,270 on credit card purchases this Christmas whereas the average maximum new purchase protection cover is around £1,533.

Sean Gardner, Chief Executive of MoneyExpert.com, said: “Purchase protection is a nice bonus, particularly at this time of year. It covers you against those frustrating eventualities such as accidental damage or even theft – things that won’t often be covered by a product’s guarantee or warranty.

“Of course, many homeowners will have covered their belongings through their home contents insurance, but the added protection is certainly not to be sneered at – there are always loopholes in insurance policies so you can never be over-protected. And this is free.

“If you’ve got more than one card, it might be prudent at Christmas to use the one with the purchase protection to avoid any nasty surprises if things go wrong.”

MoneyExpert.com’s analysis reveals that the highest amount of free new purchase protection available is £15,000, offered by Nationwide Building Society. However, only 22 of the 122 cards with free cover will reimburse purchases of over £1,000.

Sean Gardner added: “Don’t assume that your card has purchase protection. Even some gold and platinum cards don’t include it as standard so check the small print to be sure.”