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Q: I am about to open a new balance transfer card. One concern I have is what happens to the purchase protection if I transfer my balance?
A great perk that credit card companies offer is purchase protection on items you buy with your credit card. This includes problems with the quality of products or services you received. Many people find themselves afraid to transfer a balance to a new card for fear that they’ll lose this purchase protection on the item.
The good news is this: transferring a balance to another card does not in any way cancel or affect the protection. That is right: your purchase will still be covered by your credit card company.
Purchases aren’t simply covered by credit cards before they’re paid off. This would create incentive for cardholders to put off paying their account balance in full, waiting to see if something went wrong with the purchase, and ending up with large interest bills in the process.
Instead, when you make a purchase with your credit card, the company charges the merchant you purchased from a fee. This fee in part covers the protection your credit card company offers you. Carrying a balance on the item has nothing to do with whether or not you receive purchase protection.
The important thing to remember about purchase protection is to check the terms of your credit card company. The amount of time you have to notify the company of any dispute over the quality of the item or a transaction varies.
Common disputes include damaged merchandise you can’t return, being billed twice, being charged for a product that never arrived and finding a charge on your card but not knowing who the biller is.
You usually have around 60 days to notify your credit card company of any disputes with your account if the dispute is over a transaction. This makes it very important to go over your statement every month for errors and call your card issuer immediately.
If you have a dispute over the quality of the product or service you received you usually have more time.
In short, transferring a balance to another card does not cancel or affect the purchase protection the original credit card company offered. You will still have protection on the item with the original card company, not the company that receives the transfer.
You should definitely make the transfer if you’ll save money in the long run on interest as well.