Extended Warranties: A Great Way to Cash In

Summary: It’s happened to all of us. Your laptop stops turning on just three weeks after its original warranty ends. Click through to see if your credit card’s extended warranty protection can help.

A credit card’s warranty protection extends the warranty on products that you purchase using that specific credit card. Not all credit cards offer this protection. But those that do usually extend the terms of the original manufacturer’s warranty for up to one year after the original warranty expires.

Say you buy a refrigerator, putting the purchase on your credit card that offers an extended warranty on purchases. That refrigerator might come with a three-year original warranty. But say its ice maker starts leaking a month after the original warranty expires. If your credit card offers extended warranty protection, you may be eligible to use this benefit to cover any repairs needed to your fridge, even though the product’s original warranty has expired.

Extended warranty protection can save you hundreds or even thousands — of dollars. That’s why it’s such a valuable credit card perk.

There are limits

Extended warranty protection does come with limits, though.

• Purchases must be on the card. First, the protection only applies to purchases you make with the credit card that offers it. If you paid for a TV with cash or a different credit card and it breaks down after the warranty ends, you can’t use your credit card’s extended warranty perk to cover its repairs.
• Per claim limits. Credit cards also limit how much they will pay on each claim. This varies, but most cards limit you to $10,000 for each claim. Maybe you splurged on a high-end stove. If replacing it after its warranty expires will cost $12,000 and your card limits you to $10,000 per claim, you’ll need to cover the remaining $2,000 on your own.
• Yearly limits. Cards also limit how much you can claim per year. This varies, but most card issuers limit you to $50,000 worth of extended warranty claims each year.
• The fine print. Read the fine print of your coverage, too. Most cards extend a product’s original warranty for up to an additional year, while many cards’ extended warranty protection coverage only applies to original warranties that last for three years or less. If your product came with an original warranty that lasts five years, you won’t be able to count on extended warranty protection if it conks out in the middle of year six.
• Terms change. Credit card perks routinely change, so be sure to check your credit card’s website before making a purchase and call your credit card company for clarification on any details.

Filing a claim

How you file an extended warranty claim varies depending on your card provider. But you’ll usually need the following information:

• The receipt from the product you purchased
• A copy of the original manufacturer’s warranty
• Your credit card statement showing that you used your card to purchase the item
• A description of the damage or malfunction suffered by the item you plan to repair or replace

Some card providers allow you to file a claim online or by mail. Others require cardholders to file a claim by calling a special phone number dedicated to the process.