Credit card extended warranties: How do they work?

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Some credit cards come with valuable benefits that may not seem that great until you actually need them. One such hidden credit card perk is the extended warranty, which can help repair or replace expensive items you purchase with your credit card provided they meet certain conditions.

The purpose of extended warranties is exactly what it sounds like it would be — to extend warranties on items that already come with a manufacturer’s warranty. While it’s pretty obvious an extended warranty won’t come into play for the bulk of items you purchase with a credit card, having this protection can easily save you thousands of dollars when you use plastic to pay for pricey items you want some coverage for, like appliances, new computers or electronic equipment.

What is a credit card extended warranty?

A credit card extended warranty applies to purchases made with a credit card that offers a manufacturer’s warranty to begin with, and you can qualify for this coverage just by paying with the right credit card.

The terms of your credit card extended warranty coverage can vary based on the type of card you have, but extended warranties are usually available for a set amount of time and up to a specific dollar amount. Other terms can apply. For example, credit card extended warranties from some types of cards may only apply to manufacturer’s warranties that last for a specific period of time, like three years or less.

What is and isn’t covered by credit card warranties

What this coverage includes (and excludes) can also vary depending on the credit card you have. With that being said, most credit card extended warranties will add at least one year of warranty coverage after the item’s manufacturer’s warranty expires.

Covered events usually match the manufacturer’s warranty terms and conditions, but may include coverage for defects in material or workmanship of a product. If you purchase a refrigerator and the ice maker or electronic control board stops working, for example, this is typically something that would be covered by a manufacturer’s warranty while it’s in force.

Instances that can exclude your item from coverage from a manufacturer’s warranty can vary depending on your card but may include acts of war, normal wear and tear, damage caused by modifications to the product and more. Make sure to read through your credit card’s extended warranty paperwork so you know what is and isn’t included ahead of time.

How do credit card extended warranties work?

Credit card extended warranties are fairly cut and dry and easy to use. All you have to do for this coverage to apply to your item is to use a credit card with extended warranty coverage to pay. You also need to make sure that the item comes with a manufacturer’s warranty, and that you keep any paperwork that lists this information.

Further, you will want to keep a copy of the original receipt of purchase for the item, as well as the credit card statement that shows you paid with your credit card. You’ll need all of this information when you go to file a claim.

What to look for in an extended warranty

If you’re choosing a credit card based on its extended warranty coverage, there are definitely some factors that make some coverage better than others. Here are the main details to be aware of:

  • Coverage per claim: Most credit card extended warranties come with a per claim limit of around $10,000, but some credit cards offer more or less extended warranty coverage, so make sure to check.
  • Limits per eligible card: Some credit cards also offer coverage with limits for each eligible card, which may be as high as $50,000. These limits are still worth noting if you plan to purchase a lot of expensive equipment with your credit card and want extended warranty benefits to apply.
  • Length of coverage: Most extended warranties add on another year to the manufacturer’s warranty for your items, but some types of coverage only apply for original warranties of up to three years and others apply another year after a five-year manufacturer’s warranty period.
  • Exclusions: Check your card’s policy for any exclusions that might bar you from using your credit card’s extended warranty coverage. These can vary based on your card issuer.

What credit cards offer an extended warranty?

Many credit cards offer extended warranty options, although the length and limits of this coverage can vary. Major issuers that offer extended warranty options for their credit cards include:

Issuer Maximum Coverage Extended Warranty Offer
 Visa $10,000 per claim For manufacturer warranties that are less than a year, Visa will double the warranty. For warranties that last 1-3 years, Visa will add an additional year of coverage.
Mastercard $10,000 per claim Mastercard doubles manufacturer’s warranty of 24 months or less.
Capital One $10,000 per claim, maximum per cardholder is $50,000 Coverage amount and length varies. In most cases, manufacturer warranties that are eligible for an extended warranty through Capital One must last three years or less.
Discover $10,000 per claim, maximum per cardholder is $50,000 Currently discontinued. Eligible products purchased with Discover card prior to Feb. 28, 2018 still qualify for the duration of their extended warranty.
Citi $10,000 per claim Up to 24 months of extended warranty available on eligible purchases.
Chase

 

$10,000 per claim, up to $50,000 per account Coverage up to $10,000 per claim on eligible purchases with a manufacturer warranty that lasts three years or less.

How to use an extended warranty

To use your credit card’s extended warranty coverage, you should start by gathering the following information:

  • Your original receipt
  • Proof of the current manufacturer’s warranty
  • Your credit card statement that shows the purchase was made
  • A description of damage or malfunction of the product you are hoping to repair or replace

Once you have this information in hand, you’ll want to begin the process of filing a claim. However, the way you file a claim for extended warranty coverage can vary dramatically by card issuer. With American Express credit cards that offer extended warranty coverage, for example, you can only call into their claims hotline to file an extended warranty claim. With Chase credit cards that offer extended warranty coverage, on the other hand, you can file a claim over the phone or online.

Best credit cards for extended warranties

Many credit cards offer extended warranty coverage, but some cards offer longer or better coverage than others. Here are three of the top rewards credit cards with credit card extended warranty benefits:

Costco Anywhere Visa® Card by Citi: Best for gas and Costco purchases

The Costco Anywhere Visa® Card by Citi lets cardholders rack up 4 percent back on up to $7,000 in eligible gas spending each year (then 1 percent), 3 percent back on dining and eligible travel purchases, 2 percent back on Costco and Costco.com purchases and 1 percent back on everything else. There is no annual fee with your paid Costco membership, and you’ll get extended warranty coverage for up to 24 months. This coverage is good for the cost to repair or replace your item or $10,000, whichever is less.

The information about the Costco Anywhere Visa Card by Citi has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.

Chase Sapphire Reserve®: Best premier travel credit card

The Chase Sapphire Reserve® starts you out with 50,000 points when you spend $4,000 on your card within three months of account opening. You’ll also earn 10X points on Lyft rides through March 2022, 3X points on travel and dining (after earning your $300 travel credit) and 1X points on all other purchases. Premier travel benefits you can qualify for include Priority Pass Select airport lounge membership, a $300 annual travel credit, a credit for Global Entry or TSA Precheck membership and more. Your points are also worth 50 percent more when you book travel through the Chase Ultimate Rewards portal. A $550 annual fee applies, yet you’ll also qualify for extended warranty coverage good for up to $10,000 provided the item has a manufacturer’s warranty of three years or less.

Blue Cash Preferred® Card from American Express: Best for groceries

The Blue Cash Preferred® Card from American Express is superior as a grocery store card based on the fact you earn 6 percent back on up to $6,000 in U.S. supermarket spending each year (then 1 percent), as well as 6 percent on select U.S. streaming services. You also earn 3 percent back at U.S. gas stations and on transit and 1 percent back on everything else you buy. A $95 annual fee applies, but you get the opportunity to earn a $250 welcome bonus when you spend $1,000 on your card within three months of account opening. In terms of credit card extended warranty coverage, you’ll get one additional year of coverage for items with a manufacturer’s warranty of five years or less. Coverage is limited to up to $10,000 for eligible items and up to $50,000 per eligible card.