Compare credit card extended product warranties
By Melody Warnick
|COMPARE CREDIT CARD EXTENDED WARRANTIES|
|Program||What it covers||What's not covered||Product exclusions||How to file a claim||Cost|
|MasterCard Extended Warranty||Doubles the manufacturer's warranty or a purchased service contract, up to 12 months. Covers repairs or replacement up to $10,000||Normal wear and tear; damage from power surges; failures covered by product recalls; shipping costs; losses due to natural disasters; mold damage||Cars and boats; software; antiques; pets; plants; perishables; consumables; refurbished or used items; data storage media such as DVDs; real estate or permanently installed items such as ceiling fans; items purchased for resale, professional or commercial use; products covered by an unconditional satisfaction guarantee
30 days, then submit a signed claim form, credit card receipt and statement, itemized purchase receipt, service contract and/or manufacturers' warranty, plus an itemized repair estimate
|Visa Extended Protection||Doubles the manufacturer's warranty up to 12 months. Applies to manufacturer warranties of 3 years or fewer. Covers repairs or replacement up to $10,000. Maximum annual benefit: $50,000||Normal wear and tear; items lost during delivery; theft or damage from baggage handlers; losses due to natural disasters
||Cars and boats; software; antiques; pets, plants; perishables; consumables; medical equipment; used items; items purchased for resale, professional or commercial use; real estate or permanently installed items such as ceiling fans, items purchased outside the U.S.
||Call 888-565-8472 or go to Visa.com/eclaims within 60 days. You'll need a claim form, your card receipt, itemized store receipt, manufacturer's warranty, any other applicable warranty, repair order, a description of the item and its serial number||Free|
|Discover Extended Warranty||Doubles the manufacturer's warranty or a purchased service contract, up to 12 months. Applies to manufacturer warranties of 3 years or fewer. Covers repairs or replacement up to $10,000. Maximum annual benefit: $50,000||Damage not covered by the original warranty; repairs at an unauthorized facility; normal wear and tear; power surge damage; shipping costs; damages resulting from contamination such as hazardous waste or mold||Cars and boats; services; plants; software; perishables; used or refurbished items; items purchased for resale; real estate or permanently installed items such as ceiling fans||Call 800-DISCOVER within 45 days and submit a claim form with the store receipt, Discover statement, manufacturer's warranty, any purchased warranty, and proof that you've repaired or replaced the broken item. (They'll reimburse you within 60 days.)||Free|
|American Express Extended Warranty||Doubles the manufacturer's warranty up to 12 months. Applies to manufacturers warranties of 5 years or fewer. Covers repairs or replacement up to $10,000. Maximum annual benefit: $50,000||Damage from natural disasters or power surges, unless covered by manufacturer's warranty; failures covered by product recalls; shipping costs; maintenance; damages to computers or their components covered by a purchased service contract; fraud, abuse or illegal activity of any kind by the account holder||Motorized vehicles; motorized devices used for landscaping, demolition or construction; real estate or motorized devices installed in a building; plants; pets; perishables; consumables; items purchased for resale, professional or commercial use; products covered by an unconditional satisfaction guarantee||Call 800-
225-3750 or file an online claim within 30 days. You'll need to provide your card receipt, original store receipt, original manufacturer's warranty, service contract, a repair estimate and the defective item
Credit card extended warranties provide an alternative to the often-criticized, but very popular, extended service contracts and warranties sold through retailers. Like credit card warranties, they have severe restrictions on what they cover. Unlike a card's warranty, they aren't free, costing an average of 10 percent to 50 percent of the items' original prices.
Selling extended warranties became a multibillion-dollar profit center for retailers -- especially those selling electronic equipment -- beginning in the 1980s. According to a 2009 Carnegie Mellon study of retail buyers' behavior, consumers felt reassured by the warranties when they bought unfamiliar products. This reassurance was particularly valued for products bought for enjoyment, not utility. And 49 percent of early adopters make sure their brand-new gadgets are covered by a protection plan, says a 2012 study by Assurant Solutions, an extended warranty provider.
The value of an extended warranty depends a lot on the likelihood that the product will break during the covered period. According to Consumer Reports, the failure rate for television equipment is only 9 percent in the first three years, compared to 26 percent for phone equipment. Consumer Reports says that with a few exceptions, extended warranties aren't worth the money.
If you decide to go for an extra warranty, what you're offered at the cash register is not your only choice. "I think a lot of people are under the impression that if I buy something at Best Buy, I have to buy a Best Buy warranty or nothing," says William Duckworth, a professor of business intelligence and analytics at Creighton University. Sure, you can buy the store's warranty, but you can also purchase an extended protection plan straight from your product's manufacturer (think AppleCare for Apple products) or from a growing selection of third-party companies that sell warranties directly to consumers, such as SquareTrade and Protect Your Bubble.
Of course, all that choice can make it tougher to figure out what you need.
Consider these four factors:
If a warranty costs "under 10 percent to 15 percent of the purchase price [of your product], you're probably getting a pretty good deal," says Duckworth, who developed the Warranty Consultant app to help consumers decide whether a warranty is a smart buy.
Ask about deductibles, too. Not all warranty programs have them, but better coverage sometimes means paying big bucks later.
In a time when 24-7 access to devices and appliances doesn't feel optional -- and when replacing them is so pricey -- a good warranty can be a lifesaver. Just be sure to do your homework first.