Knowing the ins and outs of your card’s extended warranty plan can save you money on the cost to repair or replace broken items that wouldn’t otherwise be covered. But first, you need to understand how extended warranties work, some of the standard exclusions, and other details of these common card perks.
What Is the Credit Card Extended Warranty Feature?
In general, an extended warranty provides guarantees of repair or service of an item for a certain period beyond the original warranty. Typically, retailers sell these warranties as an optional add-on for your original purchase. The more expensive the item is, the more expensive the add-on warranty will be, in most cases. As an alternative, you could decline the extended warranty and sock money away in a savings account to repair or replace the item. Or you could read about your credit card’s extended warranty plan before buying to ensure the plan provides similar or better coverage. Often, card-based warranties work like retailer warranties, providing coverage up to the purchase price for a certain period of time after the purchase. However, if repairing or replacing your purchase is more than you originally paid, your reimbursement will be equal to the purchase price.
How Do Credit Card Extended Warranties Work?
Typically, an extended warranty mimics the original warranty’s rules, exclusions, and standards. So the original item must have an original U.S. warranty to qualify for an extended warranty. As well, a credit-card warranty could act as a type of secondary insurance. If you did buy a store’s extended warranty (say, because you didn’t know your card had an extended warranty benefit), you might need to first pursue a claim against that warranty. In most cases, credit card extended warranties cover up to $10,000 per claim and $50,000 per account. The length of extended coverage varies widely, from months to years. The most generous policies offer two-year extensions of the original policy and any extended warranty you already purchased. For example, suppose you buy a fitness tracker with a card that doubles your original warranty for new purchases. The fitness tracker comes with a one-year warranty expiring next December and stops working in January of the following year. The original warranty wouldn’t cover repair or replacement, but the card’s extended warranty could. To make a claim, you’ll first contact the card company within a defined timeframe (usually 60 days) and determine if the fitness tracker would qualify. Then, you have a limited amount of time to submit documentation, which might include:
A claim formAn itemized purchase receiptAn original warrantyAny service contract or extended warranty you purchasedA repair estimate from an authorized service provider
If the claim is approved, the benefits provider will pay to repair or replace the item. If it’s possible to repair the tracker, the benefits provider might directly pay the repair shop, or they might reimburse you if you paid the shop first. But, once again, the reimbursement is limited to the original purchase price. If a fitness tracker cost $100 last year and is $110 this year, you’ll only get $100.
Common Warranty Exclusions
A credit card extended warranty policy may have dozens of exclusions for specific items. The most common exclusions are:
Animals, plants, perishable items, and consumable itemsAntiques, artwork, collectibles, and previously owned and used itemsMotorized vehicles and vessels, including partsSoftware, including apps Rented, borrowed, and leased itemsLand, buildings, and permanent fixtures Items for professional use or resale
Also, your watch, fridge, or other purchase probably won’t be covered if it stops working due to everyday wear and tear, lack of maintenance, or damage. Some warranties exclude losses due to natural disasters, “acts of God” (floods, earthquakes, hurricanes, etc.), and any recall-related failures. Most warranties don’t cover war or riots, though. In some cases, your extended warranty doesn’t kick in if you have a warranty of more than 12 or 24 months.
Cards That Offer Extended Warranties
While extended warranties aren’t uncommon, some issuers and networks either no longer offer them or only provide them for select cards. For example, until 2018, Discover provided an extended warranty for up to an additional year for purchases with three-year warranties. If you get a Discover card this year, you won’t get an extended warranty benefit. However, those who made purchases on a Discover card before 2018 might still benefit from an extended warranty. Here are some examples of card benefits—although not all issuers provide the same benefits for all the cards they offer consumers. Before applying, call to find out how your extended warranty benefit might work.
