PERSONAL FINANCE

Did you know your credit card may cover lost, stolen or damaged cellphones?

Natasha Gabrielle
The Motley Fool

I accidentally damaged my phone four days after I purchased it. Luckily, I use credit cards, and one of the cards in my wallet made it easy for me to get an affordable fix for my brand new phone.

Many rewards credit cards include valuable perks that can make your life better. While not all credit cards offer cellphone protection coverage, quite a few do. If your phone is damaged or stolen, this benefit can be helpful.

Instead of paying the entire cost for repairs or replacement on your own, you can use your coverage to help cover some of the cost. For many, this can save hundreds of dollars. Find out how an often overlooked credit card perk saved me over $300.

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What is cellphone protection and how does it work?

If you've never used your credit card's cellphone protection benefits, you may be wondering how it works. Here's what you need to know.

Cellphone protection usually covers both lost and damaged phones. To qualify for this perk, you must use your eligible credit card to pay your cellphone's monthly service bill. I recommend setting your cellphone service bill on auto-pay with your eligible card if you have this coverage.

When you go to file a claim, you will be required to upload documentation.

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Some examples of required documentation may include:

  • Proof that you paid for the cellphone (and it wasn't free through a promotion)
  • Proof that the cellphone is tied to your cellphone service
  • Proof that your previous cellphone service bill with paid with your credit card
  • A repair estimate provided by an authorized repair service center

Your card benefits company will likely have an online portal where you can file your claim, submit documentation, check the status of your claim, and get reimbursed. While there may be a bit of waiting while your claim is reviewed, filing a claim is a relatively simple process.

Here are some things to keep in mind before filing a claim:

  • You will likely be required to get a repair estimate before filing your claim
  • You must file your claim within the time frame listed in your benefits terms
  • When claiming a stolen phone, a police report will be required

Be sure to read the terms and conditions of your card's benefit because the specific coverage details can vary from card to card. For example, rules and coverage amounts may differ.

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Here's how this cellphone benefit helped me

I'm glad that I had this benefit. Without it, I would have had to spend $400-plus to fix my phone or choose not to get repairs done and continue using my damaged cellphone.

My credit card offers reimbursement of up to $1,000 per claim and covers up to three claims per 12 months. The deductible is $100. It's worth noting that my benefit terms state that I'm responsible for taxes and fees, so I have to pay the sales tax on the repair bill.

Once I submitted all required documentation online, my claim was approved. A day later, I received my funds. Since the pre-tax repair bill was $419 and my deductible was $100, I was paid $319. Now that everything is finalized, I'll get the repairs done and I'll pay the repair service center directly.

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Don't let credit card perks go to waste

If you have rewards credit cards, make sure that you're getting full value out of your cards and using the included benefits. If you're paying an annual fee to use your card, this is especially important. It's good practice to review the benefits of each card that you have in your wallet.

Here are some other perks that your card may offer that can be valuable:

If you're not yet using rewards credit cards, you may want to start soon. You can earn rewards on your spending and get access to valuable perks. Take a look at our list of best rewards credit cards to find the right credit card for you.

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