Editorial Policy

Surprise card perk: extended warranty

Allie Johnson

January 27, 2015

Did your pricey appliance, gadget or phone bust a couple days after the warranty ran out? If you bought it with a credit card, you might be in luck.

That's because some cards will tack extra time, typically a year, onto a manufacturer warranty on a product purchased in full with that card.

“If you use the right card when you make a purchase, you get an extended warranty for free,” says Edgar Dworsky, founder of ConsumerWorld.org.

Credit card extended warranties 101

To make sure you're protected, it's important to look at two things: the details of the extended warranty coverage on the card and the length of the manufacturer warranty for the product.

“The benefit varies from card to card,” Dworsky says.

There are some exceptions on individual cards, but each card processing network has its own policy on extended warranties, Dworksy says. Here's what each one typically offers:

  • American Express — Adds an extra year of warranty to a product that has up to a five-year manufacturer warranty.
  • Discover — Offers double the manufacturer warranty up to one extra year on products with a warranty of up to three years.
  • MasterCard — Will double the manufacturer warranty up to one extra year on products with manufacturer warranties of up to one year.
  • Visa — Will add an extra year of warranty to a product with a manufacturer warranty of up to three years.

So, before you buy an item for which you hope to get extended warranty coverage, double check the length of the manufacturer warranty, Dworsky says.

If you don't, you might get an unpleasant surprise if you need to file a claim. For example, if you pulled out a MasterCard to buy a big-screen TV with a two-year warranty, you probably won't get the coverage because the original warranty lasts too long, Dworsky says.

“It's critical to know what card you're using,” he says.

Also, you should know what is, and isn't, covered. The coverage on credit cards extends the manufacturer warranty, which typically covers defects in materials and workmanship, such as a button that stops working or a battery that fails to hold a charge, says William Duckworth, a statistics professor at Creighton University in Omaha, Nebraska.

However, accidental damage typically is excluded from basic manufacturer warranties and credit card extended warranty coverage, Duckworth says.

So, to get coverage for catastrophes such as dropping your new iPhone on the pavement or into the tub,  you typically must purchase additional coverage through some retailers or third-party providers such as Square Trade, says Duckworth, who developed an app, Warranty Consultant, to help consumers decide whether to buy a protection plan in any given situation.

But clumsy consumers, take note: if an accident happens soon after you buy an item, you might be protected. Purchase protection, an additional perk that comes with some credit cards, typically does cover accidental damage that happens within a short timeframe, usually 90 days, after purchase.

Extended warranty tips and tricks

If you want to make the most of the extended warranty coverage on your credit card, here are five tips:

  1. Check your cards ahead of time. Before you need to make a major purchase, see which of your cards offer extended warranty coverage, and look at the terms and conditions, Dworsky says. “The simple action of pulling the wrong card out of your wallet can mean the loss of a very important benefit,” he says.
  2. Watch for exclusions. One important thing to look at: What items are excluded from coverage? “The longer the list, the more I'd worry,” Duckworth says. Visa, for example, excludes airplanes, boats, computer software and other items. When Dworsky bought a piece of art, he made sure to use a card with extended warranty coverage that didn't exclude art.
  3. Choose warranty over points. When you go to make a big purchase, reach for the card with the right warranty coverage first, Dworsky says. Sure, you might earn $25 or $50 in rewards on a major purchase, but an extended warranty can be worth hundreds or even thousands of dollars.
  4. Save documents. Keep the original receipt from the purchase along with the manufacturer warranty, Dworsky recommends. In fact, Visa encourages consumers to send in the information so the documentation is on file if they ever need to make a claim.
  5. File a claim right away. If you do need to use the coverage, don't delay, because extended warranty coverage typically has time limits. For example, Discover requires that you file a notice of claim in writing within 45 days of the loss.

One final thought: Most credit card extended warranties state that the item can be repaired or replaced at their discretion. So, if your phone, TV or fridge goes kaput, don't get too excited about getting a shiny new one.

“It's most likely going to be a repair,” Dworsky says.