5 Credit Cards That Act As Warranties

NEW YORK (MainStreet) — One of the key choices shoppers must make when purchasing most electronic products and appliances is whether it’s worth forking over the extra money for an extended warranty, but what many don’t realize is they already have one.

Visa (Stock Quote: V) and MasterCard (Stock Quote: MA) both offer complimentary extended warranty and purchase protection with many of their cards, while American Express (Stock Quote: AXP) provides coverage for all cardholders. (Discover cards offer warranty protection as well, though only for a fee that varies based on the product and the card.) While the plans differ slightly, each card that has it can automatically extend the manufacturer warranty for upwards of a year or more and the plan insures the product against loss or damage in the first 90 days after purchase as long as the customer used the card to buy the product. Still, many cardholders are unaware of their own coverage.

“Not a lot of consumers take advantage of this coverage,” says Odysseas Papadimitriou, CEO of the credit card comparison site CardHub.com. “If a product breaks down and their manufacturer’s warranty has run out, they don’t think about whether they used their Visa card to make the purchase.”

In fact, CardHub estimates that less than 5% of cardholders actually make use of the warranty benefits that come with their card, which could be the result of two factors. First, the coverage is automatically included on the cards that have it – with the exception of Discover cards – meaning it might fly under the radar for those cardholders who aren’t looking for it. What’s more, even those who know they have coverage may have some difficulty finding out the exact details.

What Protection Does Your Card Offer?

Unlike most credit card perks, warranties are generally offered by the credit card network (Visa, for example) rather than through the issuer (like Chase or Bank of America). In theory, that should make it easier to determine whether and how much you’re covered, except that the credit networks still offer different amounts of protection for different categories of cards and don’t offer it for everyone.

Visa only provides warranty protection for its Signature cards, according to a company spokesperson, which are considered the company’s premium products and include cards like the Chase Sapphire and Chase Freedom Signature. With these cards, Visa will double the original manufacturer warranty for up to one year extra on any warranty that’s one year or less. These cards also ensure you purchase protection, meaning you can replace or repair most products worth $500 or less if it’s been lost or accidentally broken in the first 90 days after the purchase date.

MasterCard offers nearly identical protections, but it is a bit more vague on which cards apply, and those that do tend to be very exclusive. A company spokesperson told MainStreet that “most” of MasterCard’s Gold and Platinum cards offer these protections, as well as the World and World Elite cards. Many of the company’s professional and consumer debit cards also come with the warranty and purchase protection, making this perk a little more attainable for the average consumer, though still vague.

On the other hand, all of American Express’s cards, with one exception, extend the warranty by up to one extra year for any original manufacturer warranty of five years or less. The exception is the ultra-exclusive Centurion card – better known as the Black Card – which extends the warranty for three years. Each of these cards also offers 90-day purchase protection.

For this reason, credit experts generally consider American Express to be the best of the bunch when it comes to warranty protection.