Visa USA to End Gold Card Purchase Protection Perk

Gone are the days when you could walk out of a store carrying a Baccarat crystal vase, accidentally drop it on the sidewalk and automatically expect your gold credit card to reimburse the purchase price.

Visa USA Inc. has announced that starting March 1, banks and other issuers of Visa gold cards will no longer have to offer purchase protection--the insurance covering the cost of merchandise broken or stolen.

Although the MasterCard gold card and all American Express cards still offer the service, credit card industry analysts are noticing a general cutback on some of the perks companies use to try to entice customers to their cards in the first place.

“You can attach lots of bells and whistles to your card, but if the customer doesn’t care or doesn’t use them, what’s the use?” said Maria Mendler, spokeswoman for Citibank, the largest credit card issuer in the U.S. with 38 million cards.

The New York-based bank canceled two programs at the beginning of the year--extended warranties for products purchased with its cards, and guaranteed lowest prices, where the bank refunds the difference if you buy a product and then see it elsewhere for less. Customer research found that the plans were underutilized and weren’t bringing in new customers, Mendler said.

But Citicorp offers purchase protection on all its cards and will continue offering that insurance even after Visa drops it.

Chase Manhattan Corp., which is to combine card operations with Chemical Banking Corp. as part of a larger merger later this year, also intends to voluntarily continue purchase protection, but it has already canceled an extended warranty program.

Visa spokeswoman Stephanie Caracristi said the company discontinued requiring purchase protection because research showed gold card consumers find it less important than other perks such as free extended warranties.

Industry-watchers said enhancement programs are not only expensive, they are subject to abuse.