How My Credit Card Saved Me $500 on a New Cellphone

Getting this benefit is as easy as filling out a claim form and providing a couple pieces of supporting documentation.

We frequently hear the long lists of perks and benefits that the best credit cards offer their cardholders. But how often do we remember to use our card issuer's online shopping portal to score discounts, use our promised purchase protection, or take advantage of our trip cancellation insurance? Sure, these things all serve a purpose, but for the most part, they aren't benefits that get used every day, or even annually.

Recently, I used one of my credit card's benefits for the first time, and I was surprised to learn how easily I was able to save $500 toward the purchase of a new cellphone.

Can you hear me now?

Many credit cards offer cellphone protection insurance. They work something like this: You pay your monthly phone bill with said credit card, and if anything happens to your cellphone, you'll be covered for a certain dollar amount toward a repair or replacement. These days, new phones can be prohibitively expensive, so when it comes to covering the cost of a new one, every little bit helps.

As it happens, my fiancé has a bit of a rocky track record with cellphones -- gravity is not his friend. But the last time he dropped his phone and smashed it up, rendering it useless, we got an idea. Several months ago, I added him as an authorized user to my primary credit card, and for the past several months, he's been using the card to pay his cellphone bill. A quick look at the credit card benefits through the online portal told me this should qualify us for the card issuer's cellphone protection insurance.

Filing the claim

Filling the claim was relatively easy -- minus one step that I'll get into in just a moment. Here's how I did it:

• I logged into my credit card account online and clicked on "Card benefits."
• The card benefits screen listed every benefit that my credit card offers, but it was easy to find and click on the benefit for cellphone protection.
• From there, I was taken to a page that outlined the benefit and eligibility requirements, and also provided a link to an external site to file a claim.
• On the external claim site, I chose my country of residence and the type of claim I was filing (in this case, "wireless cellphone protection"). Then I entered my credit card number and the date the phone was damaged.
• The final page of the claim had me list all other pertinent details -- what our carrier company is, our monthly phone bill amount, and when the last bill was paid.
• Lastly, I had to describe in detail what happened to the phone.
• All that was left to do was submit the claim.

Shortly after submitting the claim, we received a confirmation email letting us know it was being processed. We were asked to provide a copy of the prior month's credit card statement showing proof of the cellphone bill being paid with the card. That was easy enough to find online and upload.

The last piece of information the credit card company requested was the more complicated bit: It wanted a quote from a licensed shop showing how much it would reasonably cost to fix or replace the phone. You may have noticed that cellphone repair shops have popped up all over the place these days, so luckily, this step was simple enough to complete. We easily found a shop, got a repair tech to sign off on the fact that the phone was irreparable (for a small fee), and then submitted that final piece of documentation with our claim.

Just like that -- free money!

About a week later we received an email telling us our claim had been processed and that $500 would be credited to our credit card account within five to seven business days. The eligible insurance amount on our credit card was actually $550 based on the cost of the phone, but the company did subtract a $50 deductible, leaving us with $500 to use as we pleased.

We didn't wait until the funds arrived to purchase my fiancé's new phone, but it was nice knowing that we would be able to eliminate a nice chunk of the debt we incurred to make that purchase. We also learned that the benefit can be used up to $1,000 per year, so should my fiancé (or I) have another losing scuffle with gravity, we would be covered for another $500 in funds this year. To me, the best -- and most surprising -- part about this whole experience was the fact that this benefit came from a credit card that doesn't even charge me an annual fee.

Don't miss out on credit card benefits

Log in to your credit card account and brush up on the benefits it offers. Even if you were familiar with your card's benefits at one point, you may want to take another look. Issuers often make updates and add new perks that you might not know about. Chances are, your card offers some benefits that could save you some real money. Generally, the more premium cards (those with the highest annual fees) offer the most lucrative benefits. But just as I discovered, even cards with no annual fee still offer their cardholders some useful perks. You don't want to leave that free money sitting on the table.