Credit Card Perks: Extended Warranty and Purchase Protection

Youn couple shopping for electronics

When you read up on the particulars of credit cards, you might notice the terms “extended warranty” and “purchase protection.” Sometimes referred to as extended protection, purchase security, or purchase assurance. Most glaze over these perks and focus on points or rewards associated with the credit card in question. However, extended warranties and purchase protection can come in handy and can save you money on big-ticket items.

Extended warranties operate alongside manufacturer warranties, and purchase protection provides assurance for theft and damage.

What is an extended warranty?

Often when you purchase a product, you will receive a complimentary manufacturer’s warranty. Extended warranties are available from your credit card provider to extend the manufacturer’s warranty, which provides the consumer with additional coverage. If you purchase a product that doesn’t have a manufacturer’s warranty, an extended warranty will not apply.

An extended warranty will only cover products purchased using your credit card. Some credit card companies require you to register the product with them to be eligible for the coverage. Lastly, if you cancel your credit card used to make the purchase, you may not qualify for the extended warranty benefit.

How does extended warranty coverage work on your credit card?

When the manufacturer’s warranty on your product expires, the extended warranty from your credit card provider will kick in. The extent of additional coverage depends on the credit card provider. Also, the extended warranty will only cover the same components of the product as the original manufacturer’s warranty included. Manufacturer’s warranties usually cover the cost of flaws or defects resulting from factory installation.

To help you understand, here’s an example. If you purchase a cellphone with a CIBC Aventura® Visa Infinite Privilege* Card and the battery is faulty, a manufacturer’s warranty would typically cover the cost. However, let’s say your manufacturer’s warranty only lasts one year. Then a year and a half later, your phone battery breaks. At this point, your credit card may provide financial assistance through their extended warranty because the manufacturer’s warranty expired. For example, CIBC’s Extended Protection offers cardholders triple the term of the original warranty for up to two additional years.

Some extended warranties are not limited to the items you purchase for yourself. The CIBC Extended Protection also covers gifts you have bought for others. The specific offerings will vary by the credit card issuer and may have different terms and conditions that apply.

If you would like to make a claim using your extended warranty, contact your credit card provider or refer to your certificate of insurance (available online if you didn’t save it). They will likely request supporting documentation such as a record of the purchase and the original manufacturer’s warranty.

What is purchase protection?

If you make a purchase and the item gets damaged or stolen, often that is your loss, and there’s not much you can do about it. This is because most products do not come with insurance. Even if it does, you are usually required to pay extra to obtain insurance coverage.

Purchase protection is a form of insurance that safeguards products against theft or damage for a specified period. Purchase protection is provided by your credit card company, which means that the duration of coverage and amount of coverage may differ depending on the credit card you use.

How does a purchase protection policy work on your credit card?

To take advantage of purchase protection, you must purchase the product with your credit card that offers the insurance. Otherwise, you will not be eligible to use the protection insurance if your product becomes damaged or stolen.

If you would like to file a claim for a stolen or damaged product you purchased, contact your credit card provider. Your provider will likely want back up documentation to support your claims, such as a record of the purchase, or police report. As a general rule, for big-ticket items, you should always keep the receipt and match it with the credit card statement. This is especially important if you intend to make use of purchase protection.

Purchase protection comparison

To determine what type of purchase protection is best for you, check out the Mastercard, Visa and American Express comparisons below.

Mastercard Visa American Express
Coverage $1,000 per claim, $50,000 per account holder $500 per claim, $50,000 per account holder $1,000 per claim, $50,000 per year
Period of Coverage 120 days 90 days Maximum 120 days
Product Registration Not required Not required Not required

Keep in mind that the above coverage can vary from credit card to credit card. Make sure to read the fine print to determine what your credit card covers precisely.

What is the difference between purchase protection and extended warranty?

The main difference between purchase protection and extended warranty is the coverage. Purchase protection covers a broader array of damage, whereas extended warranties are limited to the coverage within the original manufacturer’s warranty. Furthermore, purchase protection covers theft and damage, whereas extended warranties cover manufacturing defects.

On the other hand, purchase protection and extended warranties provide the consumer with additional assurance for their product purchases. The product also must be purchased with your credit card to take advantage of purchase protection and extended warranty perks.

A word about the fine print

The fact of the matter is the devil is in the details. In other words, the fine print will give you all the details regarding purchase protection and extended warranty coverage.

If you are interested in taking advantage of purchase protection and extended warranties, be sure to read the fine print of your credit card agreement. It will be more challenging to take advantage of these perks if you consider them as an afterthought. This is because you may have overlooked the necessary documentation or requirements to make a claim.

Make the most of your purchases

Most credit card providers offer purchase protection and extended warranties, yet many people do not take advantage of additional coverages. If you plan, you could save money on a repair or replacement purchase. Make the most of your credit card perks by reading the fine print and preparing to make a claim if necessary.


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