Editorial Policy

Credit Card Perk: Protection For Your Purchases

Marcia Frellick

July 5, 2012

When consumers get to the payment stage of purchasing big-ticket items such as a TV, dishwasher or outdoor grill, the sales person may push you to buy an extended warranty.

Before you say yes, there’s something you should know: You may already be covered by your credit card. To find out what your card does — and doesn’t — cover, check out our card comparison chart below.

Two layers of protection
There are a couple of ways you’re protected with most of the major credit cards — through purchase protection agreements and extended warranties.

Purchase protection usually lasts 90 days after you buy an item and reimburses you for damaged or stolen goods. Extended warranties, on the other hand, usually kick in after the original warranty on an item expires. If your original warranty was up to one year, most credit card networks double that coverage. If the original warranty was between one and five years, typically you get a maximum of one extra year.

Benefits vary by card
It’s the payment networks — American Express, Discover, MasterCard and Visa (and card companies like Diners Club) — that offer these protections, rather than issuing banks. Among the networks that do offer extended warranties and purchase protection, benefits vary greatly when it comes to what’s covered and for how long. But the coverage is generally free and a benefit that credit card users should know about, says Becky House, education director for American Financial Solutions in Seattle.

“If someone doesn’t know if their card is covered, they can just call the number on the back. It’s not automatic on all cards,” she says.

Some networks may not offer the protections on all of their cards. Discover, for example, does not offer the robust protection benefits the other major players do for free on its personal cards. If users want extra warranty coverage they can buy it from Discover’s partner SquareTrade for selected items.

The time to research your card’s coverage is when you know what you’re planning to buy, but before you get the pressure to purchase the extended warranty at the store, House says.

Even if your card does have purchase benefits, these agreements don’t cover everything. For instance, warranties typically don’t cover losses caused by certain natural disasters, nor do they cover motor vehicles, plants, animals, software, apps or any item that was previously owned, recycled or rebuilt. Items also may not be covered if they were sold with the promise of “satisfaction-guaranteed” or already covered for damage such as glass breakage.

The networks also generally won’t cover antiques or collectibles or items lost because you didn’t do your “due diligence” — if you left the item unattended in a public place, for example. The scenarios where you’re not covered can get even more obscure — for example, if your new camcorder gets trashed while you’re participating in a riot, you’re likely on your own.

Paper trail important
Purchase protection or extended warranty coverage does not mean replacing your stuff will be hassle free. Getting reimbursed or getting a new item can take time and a fair amount of paperwork.

“After you make a claim, it can take up to two months to get the replacement, so it’s not necessarily a quick process,” House says.

Your credit card company will be asking for lots of documents, so you have to be organized from the start. Start a separate file for any major purchase.

“Keep your receipts, and keep the information that comes with the package such as the original warranty information,” House says.

Networks may also ask for a credit card statement showing the purchase, an itemized repair estimate from an authorized service provider and, in the case of theft or vandalism, a police report made within 48 hours of the crime.

So where does your card network stand on this kind of coverage? Use our card comparison chart to find out what kind of extended warranty or purchase protection coverage your card has. Information on this chart is only a summary, and terms may change, so check with your network and issuer for the most up-to-date information.