One of the benefits of shopping with a credit card is that many cards offer free, extended-warranty protection for purchases that come with an existing manufacturer's warranty. But a new survey from the card comparison site CardHub.com finds that there are significant differences in the perk, depending on which network sponsors the card.
All four card networks - MasterCard, Visa, American Express and Discover - offer programs that extend existing manufacturer's warranties on at least some of their cards, generally for up to 12 months and for amounts up to $10,000. (Rules for warranty extensions are set by the card networks, rather than the issuing banks, said Odysseas Papadimitriou, chief executive of CardHub.)
But only American Express and Discover offer extended warranties to all cardholders, the study found. Those networks ranked first and second, respectively, in CardHub's overall rankings for that reason.
The survey ranked cards on a 100-point scale, with a maximum of 55 points awarded for “likelihood of coverage,†which includes the general availability of the extended warranty benefit within the network, and the range of eligible purchases; 35 points maximum for the “scope of warranty,†meaning the length of the extension and the coverage limit; and 10 points maximum for the claims process.
American Express was the best overall for extended warranty coverage, Mr. Papadimitriou said. It is the only card that extends the manufacturer's warranty on refurbished items, like computers, which are becoming increasingly popular.
Plus, American Express offers 12 months of extended coverage for items with an original, manufacturer's warranty of up to five years. That means you get six years of coverage.
The other cards are less generous. MasterCard ranked last because, while it also extends coverage for 12 months, the perk only applies to purchases with an original warranty of 12 months or less. (Its corporate cards cover existing warranties up to five years.)
MasterCard also has a particularly lengthy list of exclusions that may make coverage doubtful, Mr. Papadimitriou said, like “mechanical failures caused by normal wear and tear.â€
In general, cardholders don't have to sign up ahead of time to receive the warranty protection. But they do have to provide documentation of the purchase, including receipts, credit card statements and copies of the original manufacturer's warranty. So it makes sense to save those items for future use when making major purchases that may be covered.
Have you ever filed a claim for an extended warranty provided by your credit card? What was your experience?
