How Do Credit Card Extended Warranties Work?

What Is a Credit Card Extended Warranty?

Many appliances, electronics and other products you buy come with a manufacturer's warranty that promises to fix or replace the item if it breaks or malfunctions within a certain time frame. Most manufacturer warranties are only good for a year or two, so if your product breaks after that time, you're out of luck unless you have an extended warranty.

A credit card extended warranty is additional coverage offered through a credit card network, such as Visa or Mastercard, for eligible purchases you've made with your credit card. Generally, this credit card benefit is free and covers items you purchase that already come with a manufacturer's warranty. The coverage kicks in after the standard manufacturer's warranty expires, and it usually lasts for a specific time period and provides coverage up to a certain amount.

Typically, the terms and conditions of the coverage are the same as the original manufacturer's warranty. So if the product's warranty is for parts and labor up to $1,000, the same terms would apply to your credit card's extended warranty. Also, your extended warranty may come with other conditions.

What Does an Extended Warranty Cover?

As mentioned, extended warranties often add coverage to items you purchase that come with a manufacturer's warranty, but not always. Warranty coverage varies by the card, but warranties usually cover an item for a specific time period, up to a specific dollar amount. Refer to your credit card's benefits guide or contact your card's benefits administrator for the details pertaining to your card.

Some of the most common items that are usually eligible for extended warranty coverage include:

• Cellphones
• Electronics
• Home appliances
• Other items already covered by a manufacturer's warranty

Coverage usually doesn't apply for the following items:

• Boats, cars and other motorized vehicles
• Used or rented items
• Real estate
• Computer software
• Medical equipment

Keep in mind, normal wear and tear, damage caused by product alterations and other circumstances may also exclude a product from extended warranty coverage.

How to File an Extended Warranty Claim

Once you determine if your purchased item is eligible for coverage, take the following steps to file a claim. Let's say you purchase a $1,500 interactive treadmill with a one-year manufacturer's warranty. The treadmill works perfectly for 15 months, but suddenly fails. Here's how to use the extended warranty to make sure the machine's repairs or replacement are covered:

1. File your receipt. Save your store receipt and the manufacturer's warranty while noting each expiration date. That way, you'll know when your credit card coverage kicks in. When your treadmill suddenly goes kaput at 15 months, you can file a claim on your credit card warranty to resolve the issue.
2. Register the product. Registration isn't required because the benefit is automatic when you purchase an eligible product with the right credit card. Still, registering when you purchase a product can make the paperwork process easier when it's time to file a claim.
3. File a claim quickly. To file a claim, you'll need to contact your card's benefits administrator, typically within 60 to 90 days of the product failure. You can typically contact the administrator via your card issuer's website by phone.
4. Submit supporting documents. As with other types of insurance, you'll need to provide additional documentation that supports your claim. Such documentation could include a purchase receipt, a credit card statement showing the transaction, a copy of the manufacturer warranty and a repair estimate from an authorized service provider.
5. Repair or replace the item as directed. Once the administrator verifies your claim, they will inform you of the next steps you should take regarding product repair or replacement. The administrator may pay the service dealer directly for any repairs or reimburse you—typically within a week—if you buy a replacement product.

Credit Card Extended Warranties May Save You Money

Consider using your credit card for large purchases that could strain your budget if the item stops working correctly. But check with your benefits guide or contact your card issuer to ensure the item is covered.

If you're looking for a new card to take advantage of extended warranty benefits, check out Experian's credit card comparison platform to view personalized offers based on your credit profile.