How Credit Card Phone Insurance Could Save Your iPhone 8, iPhone 8 Plus and iPhone X
Imagine that you’ve just got your iPhone 8 or iPhone X from the Apple Store. You’re at a Starbucks fawning over the phone.
The barista calls out your name and you get up, grab your latte and return to your table only to realize the awful fact that, in the 20 seconds you were gone, somebody stole your phone.
Nobody wants to be put in that position, not only because you lose out on an incredible device, but also because you’ll be out at least $700 if you don’t have your phone covered by insurance.
There’s one easy way to solve that problem, though: choose the right credit card.
It’s a non-intuitive answer with an easy explanation and several different options to choose from. Not only that, but if you choose to sign up for a new credit card you’ll use to pay for your iPhone, there are other rewards in store that provide tremendous value.
What is Credit Card Phone Protection?
While phone protection can vary from card to card, most of them function in the same way.
If your phone is stolen or damaged, then you can file a claim with the insurance company and receive a reimbursement to buy a new phone.
The only requirement to get the protection is that you pay your cell bill with the card that has the protection.
The Basics of Credit Card Phone Protection
Wells Fargo is an example of a credit card issuer who gives cell phone protection as a complimentary perk for owning certain cards.
You’re allowed two claims a year through their program. Each claim has a maximum benefit of $600 and the deductible on the claim is $25.
The $600 maximum will leave you paying between $99 and $349, depending on which iPhone 8 you purchase.
How Credit Card Phone Protection
Differs From Wireless Carriers’ Protection
I wanted to know how credit card protection stacked up against cell carriers, so I took a look at Verizon insurance plans for a 32GB iPhone 7.
Verizon uses a popular insurance company called Asurion to process claims. Based on the information I found, wireless phone protection would be $7.15 a month with a deductible of $149.
So, using these numbers, let’s say someone stole your phone after six months of owning it. To get a new phone, you’d have to pay the deductible and the six months of premiums, which totals out to $191.90.
With a credit card plan, you’d pay $74 out of pocket.
The big difference between the two plans is that Verizon will cover the phone and accessories like earbuds, cases, car chargers and home chargers, depending on the claim.
Based on a conversation I had with a Wells Fargo card services rep, your phone is covered for cracked or shatter screens and water damage just like it is under Verizon’s plan.
Credit Cards That Offer Phone Protection
Wells Fargo and U.S. Bank offer credit cards that have phone insurance integrated into their list of perks.
The Wells Fargo Cash Wise Visa
Wells Fargo’s Cash Wise visa is a cash rewards credit card that gives you a $200 bonus if you can spend $1,000 in the first three months. Also, it’s got a 12-month 0% interest offer. In addition to these perks, you’ll earn 1.5% cash back on your purchases.
Use the Cash Wise to pay for you iPhone and you won’t have to pay interest for the first 12 months of owning the card, making it a 12-month payment plan at no cost to you.
Once you buy your iPhone, then you’ll be nearly all the way to the $1,000 requirement to get the free $200. When you hit that requirement, then you can credit the $200 to your iPhone purchase.
And, on top of that, the $1,000 you spend will earn you 1.5% cash back or $15. In all, the card can give you $215 in rewards.
Considering that a 64GB iPhone 8 costs $699 before tax, your Cash Wise rewards will chop that down to $484. The beauty of it is that you’re getting a trade-in style discount without trading in a phone.
If you can put $45 a month toward your Cash Wise balance, your iPhone will be paid off by Christmas 2018.
The U.S. Bank Platinum Visa
U.S. Bank’s Platinum Visa also offers cell phone protection.
Unlike the Cash Wise from Wells Fargo, though, this card doesn’t have any cash back incentives. It’s a very basic card that gives you 0% interest on purchases for 15 months.
A 64GB iPhone 8 will cost $751 after 7.5% sales tax. When you split up that purchase price over 15 months, you’re looking at payments of $50.
As I mentioned, the card doesn’t give you cash back rewards but you can get around that by selling your current iPhone on classified sites/apps like Craigslist and Letgo.
Assuming you’ve got an iPhone 7 that you want to sell, you can expect to get between $400 and $500 depending on where you live and how much the market for the phone changes once iPhone 8’s are sent out to customers.
Smart Consumers Will Take Advantage of Credit Card Cell Phone Protection
If you’ve got decent credit scores (700 and above), then there’s a good chance you’ll be approved for the two credit cards we mentioned here.
The Cash Wise Visa from Wells Fargo is a solid choice because of the cash-back bonus you get, which takes $200 off the balance you accrued for your iPhone 8 purchase.
While the cell phone protection you receive won’t cover accessories, it will be cheaper than the $7.15/month premiums and $149 deductible you’d pay with Verizon.