Your Credit Card’s Extended Warranty Policy Guide

If the product breaks after the original warranty expires, you may still be able to be reimbursed from your card’s payment network — MasterCard, Visa, American Express or Discover — via statement credit or check.                                                           BY CLAIRE TSOSIE

The next time a cashier asks you whether you’d like to buy the “extended warranty,” you might be better off saying no.

If you’re paying with a credit card, there’s a good chance that you’ll qualify for extended warranty coverage at no extra cost. Here’s how it works.

What is an extended warranty?

The extended warranty offered by your credit card typically adds up to a year of additional coverage to eligible purchases.

It mirrors the terms of the original manufacturer’s warranty — for example, if the original warranty covers only manufacturing defects, then the extended warranty will do the same.

Charge the item to your card that offers the coverage, and save your receipt and the product’s warranty documentation.

If the product breaks after the original warranty expires, you may still be able to be reimbursed from your card’s payment network — MasterCard, Visa, American Express or Discover — via statement credit or check.

These extended warranty policies don’t cover all credit card purchases. Computers, cars and items without manufacturer’s warranties are generally excluded, for example.

But if you have a broken dishwasher or a malfunctioning video-game console, you’ll likely be eligible for reimbursement.

Why your credit card’s extended warranty is a good deal

Extended warranties offered by retailers — which are generally different types of service plans — tend to be expensive.

A study by Consumer Reports found that the median price for a service plan was $123 for a large appliance and $37 for a small one.

Most products didn’t break in the service plan window, and even people who had repairs made under the service plan didn’t save much money compared with people without the coverage, the findings showed.

To save some money, consider relying on your card’s complimentary extended warranty policy instead. Check your credit card’s benefits to make sure your purchase is eligible for coverage before skipping the service plan.

What paperwork do I need?

To take advantage of your card’s extended warranty policy, you generally need to supply these records with the completed claim form:

• Original store receipt
• Account statement showing credit card purchase
• Copy of manufacturer’s warranty
• Other warranty or service plan policies, if applicable

Once you submit the forms, the payment network’s examiner will approve or deny your claim. The examiner may request more documents — for example, repair quotes — if you’re filing a large claim. Generally, smaller claims are processed more quickly.

Each payment network has online warranty managers, where you can upload images of your receipts and warranty coverage to your profile.

You’re not required to register products this way, but having your documents online can make it a little easier to file claims later.

Extended warranties, compared

NerdWallet compared extended warranty policies from each of the payment networks — American Express, Discover, MasterCard and Visa. Here are the major findings:

• American Express offers the most thorough coverage, extending warranties of five years or less for up to a year on all cards. It does not exclude wear and tear.
• All networks exclude motorized vehicles (cars, boats, etc.) and computers.
• American Express and Discover reimburse you with a statement credit, while Visa and MasterCard send you a check in the mail.

While benefits are generally the same across a payment network, policies sometimes vary by issuer and card. Check your card’s terms and conditions to find out about your card’s policy.

The bottom line

Your card’s extended warranty coverage could save you hundreds or thousands of dollars when your purchase breaks down. Hold onto those receipts and warranties, and you’ll be able to file a claim without much hassle. 

Claire Tsosie is a staff writer at NerdWallet, a personal finance website. This article originally published by NerdWallet.