Over the weekend, I noticed that my father bought a nice new shredder. I asked him what happened to the old one, and he said that it broke in October, and after spending awhile trying to fix it, he realized that it wasn’t going to come back to life. So why did he buy a nicer model than the old one?

Well, It Was Free!

Last August, he bought the old shredder, which came with a one year warranty, which expired two months before the shredder broke. However, by buying it with his American Express card, he got an additional year added on to the manufacturer’s warranty. He called up, explained the situation, and the customer service representatives were extremely helpful. He didn’t have the receipt, but they were able to verify that the transaction took place by looking it up in their system. He asked what proof he had to show that the shredder was indeed broken, but they said that they would take his word for it. I assume on larger purchases they would need proof that the item was unfixable or broken. They credited his account for the original cost of the shredder.

How It Works

Many credit card companies now offer free extended warranties on purchases made with that card. Some also offer price protection and other forms of protection for your purchases. Below I compare the three major credit card companies and outline the various methods and degrees of protection they offer.

VISA

• Extended Protection doubles the time period of the original manufacturer’s warranty up to one full year on warranties of 3 years or less, up to a maximum of $10,000 per claim.

• Return Protection will reimburse you for the cost of an eligible item of personal property within 90 days of the date it was purchased if you are dissatisfied with the item for any reason and the retailer will not accept the return. The benefit is limited to $250 per eligible item and a $1,000 annual maximum per account.

• Purchase Security will replace, repair, or reimburse you for eligible items of personal property for 90 days after the purchase date, up to a maximum of $500 per claim and $50,000 per cardholder in the event of theft, damage due to fire, vandalism, accidentally discharged water, or certain weather conditions.

• Price Protection will refund the difference up to $250 per item if you buy an eligible item with your card and see a printed advertisement of it for less at any retail store within 60 days of the original purchase date.

• Personal Identity Theft Benefit offers reimbursement for covered expenses you incur to restore your identity, up to a maximum of $1,000 as a result of identity theft. This includes costs for re-filling loan applications that were rejected  because the lender received incorrect information as a result of identity theft, as well as costs associated with amending records as a result of identity theft. It also covers costs for 4 credit reports and actual lost wages for time taken away from work.

American Express

• Extended Warranty extends warranties of the original manufacturer’s warranty for up to one additional year on eligible purchases with warranties of 5 years of less, up to $10,000 per item and $50,000 per year.

• Return Protection offers guaranteed product satisfaction by refunding an eligible item if you try to return an item within 90 days from the date of purchase and the merchant won’t take it back. This covers up to $300 per item and up to $1,000 per account.

• Purchase Protection protects eligible purchases from accidental damage or theft for up to 90 days from the date of purchase. American Express will replace or reimburse you for up to the amount charged to the card, up to $1,000 per occurrence and up to $50,000 per account per year.

MasterCard

• Extended Warranty doubles the original manufacturer’s or store brand warranty for up to one year.

• Price Protection will reimburse you the difference if you find a lower price for a new item within 60 days from the date of purchase.

• Purchase Assurance provides coverage for eligible items if the item is damaged for stolen within 90 days of the date of purchase.

• Satisfaction Guarantee will refund the cost of the product, up to $250, if you become dissatistied with a product within 60 days of purchase and the store will not accept a return.

I have heard that American Express offers the best protection, but based on my research, it looks like VISA does a better job of protecting buyers in a variety of ways. American Express extends warranties of up to 5 years vs up to 3 years for VISA, but I think VISA more than makes up for this with their price protection, something American Express discontinued in 2006. Along with the lack of information posted on MasterCard’s site, their disadvantage is that they offer extended warranties only on manufacturer’s warranties of up to one year.

These services could save you a lot of money, stress, and time if something were to happen to your purchases. I recommend registering your purchases online to save your purchase information so that you won’t have to dig through your records if something should happen.

My father was able to get a brand new shredder. While I listed the big 3 credit card companies, there are many others out there, and I encourage you to call them and ask what protection they offer you. It could save you hundreds or even thousands of dollars!