Consumer Comeback Blog

Unknown Benefits: Many Credit Cards Offer Extended Warranty Protection

Anyone who has purchased electronics has likely been offered the in-store extended warranty, but if you paid with a credit card, you may already be covered.

A study from the University of Maryland’s Robert H. Smith School of Business indicates that 31% of Americans buy extended warranties, spending $1.6 billion per year. Business Week reported that in-store warranties are a boon to business, but waste of money to consumers because consumers who pay with plastic often get free, extended-warranty protection. conducted a study of the extended warranty programs from the four major card networks including Visa, MasterCard, Discover and American Express. While all four major card networks extended original manufacturer’s warranties by 12 months to certain members, the study found that American Express offered members the most comprehensive warranty benefits, followed by Discover, MasterCard, and Visa coming in last.

Discover and American Express are the only networks that provide coverage to all cardholders. American Express scored high marks because they extend coverage to 12 months in addition to manufacturer’s five-year warranties and cover a wider range of items including used and refurbished products.

In addition to its lengthy list of coverage exceptions, MasterCard scored low because it is the only network that excludes physical damage to an item from its coverage. For example, MasterCard covers most items that have a warranty of 12 months or less (5 years or less for corporate cards), but they will not offer a warranty for used or antique items; collectibles of any kind that do not come with manufacturer’s warranty; recycled, previously owned, refurbished, rebuilt, or remanufactured items; product guarantees, floor models, motorized vehicles, watercraft/boats, aircraft, and motorcycles, plants, shrubs, animals, pets, consumables, and perishables, all types of media with stored data or music (including, but not limited to, computer software, DVDs, video cassettes, CDs, film, and audio cassettes, losses resulting from any Acts of God (including, but not limited to, flood, hurricane, lightning, and earthquake, mechanical failures caused by normal wear and tear or gradual deterioration.

Consumers are not required to purchase warranty plans, sign up for card warranties or register their purchases with any of the networks, but all four networks require consumers to keep their purchase receipts.