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Updated on Tuesday, September 16, 2014
Buying a new iPhone 6? You might want to think twice before shelling out $99 for AppleCare protection.
That’s because several banks and credit unions offer credit cards with a little known perk called Cellular Telephone Protection coverage, which will reimburse you if your phone is damaged or even stolen.
It’s a leg up on AppleCare, which won’t cover you for theft. And it’s on top of warranty extensions or purchase protection your card might already offer.
MagnifyMoney.com reviewed the coverage of over 25 banks and credit unions that offer this feature, and here are the findings:
What do you need to do?
Just pay for your monthly cellular plan with the eligible credit card. Each month you do, you’ll be covered. You don’t need to buy your phone with the card, so any phone you have can get coverage as long as you start paying the monthly bill with your card.
How much does it cover?
It varies from $200 to $600 per incident, with Wells Fargo offering the most generous coverage at $600 per incident reimbursement:
|Wells Fargo: $600|
|First Citizens Bank: $500|
|Hancock Bank: $250|
|Credit Union West: $250|
|Purdue Federal Credit Union: $250|
|Quorum Credit Union: $250|
|Suntrust (Visa Signature only): $250|
|Community State Bank: $200|
|Energy Capital Credit Union: $200|
|Fidelity Bank and Trust: $200|
|Fifth Third: $200|
|Spirit of Alaska Credit Union: $200|
|University and Community Credit Union: $200|
|US Alliance Credit Union: $200|
|Aggieland Credit Union: $200|
|American Partners Credit Union: $200|
|Education Credit Union: $200|
|Friends and Family Credit Union – With Checking Account: $200|
|Greater Texas Federal Credit Union: $200|
|Hudson Valley Credit Union: $200|
|IBM Southeast Credit Union: $200|
|MCT Credit Union: $200|
|Scott Credit Union: $200|
|Tarrant County Credit Union: $200|
|UnitedSA Credit Union: $200|
And you can do it for as many years as you’d like, unlike AppleCare which will only cover you for two years and ends completely after two incidents.You can request reimbursement twice per year, so for example with Wells Fargo you could get $1,200 covered each year.
What is the deductible?
It’s better than AppleCare, which charges you $79 per incident for damage.
Wells Fargo charges just $25 per claim. Most other banks and credit unions with the coverage charge $50, still better than AppleCare.
How does replacement work?
If your phone can’t be repaired, the insurance provider will pay for a replacement purchased directly from the store (in person or online) of your wireless carrier.
There is a catch: your phone might be more expensive than $600 when bought brand-new without a contract extension.
New iPhones run $649 to $800+ depending on features.
So, you might be on the hook for an extra $200 or $300 if you badly damage the phone in its early days.
But that’s a reasonable price to pay considering you’re getting the insurance at no upfront cost to you.
Insurance direct from your wireless provider often costs $50 per year or more, and it carries deductibles as high as $150 or more for more expensive phones.
If you’re someone who wants insurance on your phone, it’s probably worth opening up an account with a bank or credit union that offers superior protection.