Credit card price protection feature can be a shopper's ally

Holiday shopping is stressful enough without worrying about price reductions on yuletide treasures you already bought.

You might be able to avoid that regret by paying with a credit card featuring free price protection, which lets you get today's lower price for something you bought in the past.

It's "one of the most important benefits of any card that I am thinking of switching to," said Edgar Dworsky, founder of ConsumerWorld.org.

Price protection is potentially worth hundreds of dollars per year, but filing a claim isn't always worth the effort, especially for small refunds. And if you are already in credit card debt, charging holiday gifts is generally a bad idea.

But a credit card safeguard against falling prices can be a valuable savings tool, according to savings expert Andrea Woroch.

How it works: If you buy an item with your credit card and find it for a lower price within a specific time period — such as 60 or 90 days — price protection will refund the difference, excluding surcharges such as taxes and shipping. The lower-priced item must match the one you purchased exactly — same manufacturer and model.

The catch? Price protection isn't automatic. You typically have to monitor competing prices yourself (unless you have a Citi card with a helpful Price Rewind tool). Some issuers require you to phone a claims administrator to start the process, then file paperwork online or by mail. You will probably need to provide a claim form, itemized receipt, card statement showing the purchase and a dated advertisement for the same item.

Make the effort matter. Prices on electronics and big-ticket items, such as appliances, can experience big cuts. Both are worth tracking. A 15 percent discount on a $1,000 washer-and-dryer set means a $150 refund.

Compare with the retailer policy. Many retailers have low-price guarantees or price-matching policies. They might involve less hassle than applying for a refund via credit card price protection. But credit cards typically give you two to three months to file a claim, vs. one to two weeks for retailers, Woroch said.

Leverage sketchy retailers. You might find a low price at an online retailer you don't trust. Price guarantees, whether from your credit card or a retailer, allow you to buy the item from a trusted seller for the same price, Dworsky said.

Limitations: Price protection is typically capped. For example, a maximum claim might be $500, with a yearly limit of $2,500 in refunds. It applies mostly to goods bought in the U.S., not services, and might exclude certain items, such as food, jewelry and event tickets. Refunds are usually paid by statement credit or mailed check.

Many mainstream credit cards offer price protection, even those without an annual fee — although cards from American Express don't offer it. To find out whether your card does — and how to use it — call your issuer at the phone number on the back of the card.