Credit card purchases, what's covered?

Buying with the right credit card means you are getting free insurance that can provide more than £1,500 in payouts should things go wrong with your purchases.

Research from Moneyexpert.com shows 57 per cent of UK credit cards automatically insure new purchases against loss, theft or accidental damage.

"Purchase protection is a nice bonus, particularly at this time of year," said Sean Gardner, chief executive of Moneyexpert.

"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."

Purchase protection insurance provides cover against loss, theft or accidental damage of newly purchased goods for a set period, typically around 90 days.

The average maximum purchase protection insurance cover is £1,533.

But while most credit cards offer purchase protection insurance, this is not something that can be relied upon as a large number of cards offer no cover at all.

"Don’t assume that your card has purchase protection," Mr Gardner said.

"Even some gold and platinum cards don’t include it as standard so check the small print to be sure."

Additionally, only 22 of the 122 credit cards with free cover reimburse purchases worth more than £1,000.

"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."