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How Extended Warranties Work on Credit Cards

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There are two questions you’ll hear over and over during the holiday season. The first one is, “Would you like to open a store credit card and save 15 percent right now?” To which your reply should be: “No, thanks.”

The second question you’ll often hear when you buy a fairly expensive item is, “Would you like to purchase an extended warranty?”

If you paid by check or debit card then the answer is ... maybe. But if you used a credit card, the warranty question takes a little more thought. You might already have an extended warranty as one of your card’s benefits. If that’s the case, then buying the extended warranty is a waste of your hard-earned money.

How do you find out? Well, I hate to say this, but the answer lies within the itty bitty fine print. But as always, my goal in life is to make things easier for you. So here are the most important things you should know.

[Related Article: Shopping, and Debt, Make Big Black Friday Comebacks]

How long is the extended warranty?

The extended warranty that comes with a major credit card usually extends the manufacturer’s warranty for up to a year longer. But this can vary by card.

By the way, warranties are usually provided by the payment network (e.g., Visa, MasterCard, American Express, and Discover) and not by the card issuer (the bank). Here are a few essential things to know:

** You only get this protection if you used the card to purchase the merchandise.

** American Express offers a one-year extension beyond the manufacturer’s warranty with all of its cards. And you get this extra year of warranty coverage for products that have manufacturer’s warranties of up to 5 years (many cards only cover manufacturer’s warranties of up to three years).

** Discover doesn’t offer an extended warranty via its cards, but offers a service called SquareTrade for a fee.

** Visa’s extended warranty benefits are better than MasterCard’s.

** MasterCard gives an extra year on the warranty only if the manufacturer doesn’t offer a one-year warranty on the product you’re buying.

** Visa provides warranty protection for its “Visa Signature” cards. You get a one-year extension beyond the manufacturer’s warranty.

Let’s take a closer look at Visa’s benefits. To find out if you have a “Visa Signature” card, look on the front of your card for the words “Visa Signature.” Here’s a quick and dirty way to get the scoop on what you need to know if you have one of these cards:

** Go to Visa’s Warranty Manager Service website to get the details about what’s covered and what’s not covered. You’ll find an easy Q&A format that addresses your main concerns.

** Examples of what’s not covered: boats, autos, computer software, and used or pre-owned items.

** Purchases made outside the U.S. might be covered if there’s a valid U.S. manufacturer’s warranty on the item of three years or less.

** You must file a claim within 60 days after the product failure.

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How to file a claim

To file a claim, you’ll need to call the benefits administrator for your credit card. Here’s a handy phone list to get you started:

American Express: 1-800-225-3750

Visa: 1-800-882-8057

MasterCard: 1-800-622-7747

When you make a purchase with your credit card, keep the receipt in case you need to file a claim. Also keep the manufacturer’s warranty, the serial number, and product description information on hand. You’ll need all of this information when you make the phone call to file your claim. Make it a habit to start a paper file whenever you spend big on something. That way, you’ll be ready in case you need to use this benefit.

What’s your experience with this?

I’ve heard stories about filing claims that run the gamut from “excellent experience” to “downright ugly.” I haven’t personally ever had to use this benefit. If you have -- whether it’s a good or bad experience -- please tell us about it in the comments section.

[Resource: Get your free personalized Credit Report Card]

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Credit.com provides readers with unique insight, helpful tips and straight answers about their financial world. Our team of reporters and experts explore credit, loans, debt, saving, and identity theft topics, all designed to help you make smarter financial decisions. Visit Credit.com to sign up for your FREE Credit Report Card and find out where you stand today!

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Beverly Blair Harzog Credit.com's Credit Card Expert, Beverly focuses on credit card issues and provides insight about current news that affects the credit card industry and consumers. She's a nationally recognized expert on credit card issues and is also the co-author of The Complete Idiot's Guide to Person-to-Person Lending. Reach Beverly at creditexperts@credit.com.

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