Sometimes, products don’t work like they should. To protect against defects and other problems, products may come with a manufacturer’s warranty. But if you want to extend that warranty, you typically have to pay.
That is, unless you have a credit card with extended warranty coverage. Credit card extended warranties typically cover you for one year after the initial warranty expires. However, they have limitations, and filing a claim requires some work. As such, it’s important to understand how credit card extended warranties work and how to take advantage of them.
What Is a Credit Card Extended Warranty?
You can use your credit card’s extended warranty to file a claim beyond the original manufacturer’s warranty period if you made the purchase via the credit card. Typically, this benefit is free, assuming it’s offered by your card.
“Depending on the credit card company, [the extended warranty] often replicates the manufacturer’s coverage,” says Nishank Khanna, chief marketing officer of small business lender Clarify Capital. “If the original warranty covered only parts and labor, then the extended warranty does the same.”
What to Expect From Your Credit Card’s Extended Warranty Benefit
Many credit card issuers offer extended warranty benefits on some or all of their credit cards. While your specific credit card’s terms may differ a little, here’s what you can generally expect from the major card issuers that provide the perk.
American Express. American Express offers an extended warranty benefit on most of its credit cards. If your original warranty lasts for less than two years, American Express will match the length. If it’s between two and five years, you’ll get an extra two years. You can get up to $10,000 worth of coverage for each claim you file, but you’re limited to $50,000 in total coverage for the year.
Barclays, Capital One, PNC, U.S. Bank. Each issuer doubles the manufacturer’s warranty up to one year. The manufacturer’s warranty must be three years or less, and you’re limited to $10,000 in benefits per claim and $50,000 total for the life of the account.
Chase. You’ll get an extra year on any manufacturer’s warranty of three years or less. You’re limited to $10,000 in coverage per claim and $50,000 total on your account.
Citi. The card issuer offers an extra two years on any original warranty of up to five years. You can receive up to $10,000 per claim with no annual cap.
Discover. Discover eliminated the extended warranty benefit for its cardholders in early 2018.
Wells Fargo. The bank extends your manufacturer’s warranty up to one year. It only works on warranties of three years or less, and you’re limited to $10,000 per claim. There’s also a lifetime cap of $50,000.
What’s the Catch?
Adding an extra year to your original warranty can give you some peace of mind, but it’s possible that your purchase won’t be covered at all. Extended warranty policies vary, but they typically exclude purchases that may be prone to breakdown or damage, such as cars.
Some credit cards, for example, won’t cover used or antique items, computer software or items purchased for resale, professional or commercial use. Even if your purchase does qualify, you may become ineligible if the loss occurs due to anything related to a product recall, failure due to lack of maintenance or normal wear and tear.
Other potential exclusions include:
— Shipping, transportation and delivery charges
— Direct or indirect loss resulting from a natural disaster
— Trip, service or diagnostic charges
— Loss resulting from war or hostilities of any kind
— Loss due to mold or other hazardous substances
You can find your card’s exclusions by reading through its guide to benefits.
How to File a Claim on Your Credit Card’s Extended Warranty
After checking that your purchase is eligible, file away your store receipt and manufacturer’s warranty. Also, note the terms of the manufacturer’s and credit card’s warranty, so you know when your card’s coverage kicks in.
The extended warranty benefit is automatic, which means you don’t have to register the item you purchased to qualify for your card’s coverage. However, registering can make paperwork easier when it’s time to make a claim. Consider registering the item as soon as you buy it.
“By registering your items, you don’t have to search for the documents when you need them,” says Tia Sabawi, vice president of consumer lending at Xceed Financial Credit Union.
If you file a claim through your card’s extended warranty benefit, you’ll typically need to submit documentation for approval, including:
— Store receipt
— Credit card statement showing the purchase
— Original manufacturer’s warranty
— Itemized repair estimate from a factory-authorized service provider
If you’ve lost the receipt or original warranty, all may not be lost. Sabawi recommends calling the retailer to request a copy. Just keep in mind that there’s no guarantee it will still be on file.
Finally, check with your card issuer to find out when you need to file a claim. You may have a certain number of days to file the claim before you no longer qualify for coverage. Once you submit your claim, keep track of it through the benefits administrator’s website.
When to Opt for the Retailer’s Extended Warranty
The median price for an extended warranty on electronics is $79 for online retailers, according to a 2016 survey by Consumer Reports. That price increases to $126 for major appliances. In contrast, your credit card’s extended warranty benefit doesn’t cost you a penny.
But while your credit card’s coverage is free, that doesn’t mean it’s always the best option. An item that’s excluded from credit card warranty coverage may need an extended warranty from the retailer.
“It’s always a good idea to review what’s covered by the initial warranty, an extended warranty from the manufacturer and the credit card extended warranty,” says Sabawi. Specifically, she recommends focusing on exclusions and the terms of the warranty.
Khanna recommends only making the comparison, however, on large purchases where there’s more money on the line. “For smaller purchases, a credit card’s coverage should suffice,” he says. For example, a $10,000 furniture set may not be covered with your credit card, so you should consider a different extended warranty option if you want longer coverage on it. But a $40 small appliance should be fine with your card’s extended warranty.
If the item costs a few hundred dollars and you can easily afford to replace it, it may not be worth buying an extended warranty. But if the cost of the extended warranty is low, offers more protection than your credit card and you’d rather have the peace of mind, you may be better off paying for it.
More from U.S. News
Understanding Your Credit Card’s Extended Warranty Benefit originally appeared on usnews.com