Which Credit Cards Offer the Best Purchase Protection?

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Retailers make fat profit margins on the extended warranties they sell on products, so there’s a little secret they probably don’t want you to know: You can get warranty coverage on your purchases just by paying for them with certain credit cards.

These sorts of protections generally fall into two categories: Purchase protection, which protects against damage and theft for a few months after the initial purchase, and extended warranty coverage, which extends the manufacturer’s warranty beyond its initial period. Some cards also feature some kind of return protection, allowing you to get a refund that isn’t allowed by the retailer’s return policy.

The major credit card networks (Visa, Mastercard, Discover and American Express) differ a bit in what kind of coverage they offer, and only certain types of cards are covered. So if you think you might drop that new tablet computer in the toilet after a month or that your new lawnmower might need more than a year’s worth of repair coverage, consider which card you want to pay with. Here is how the networks stack up.

American Express

While most manufacturer’s warranties don’t cover accidental damage, buying your purchase with any American Express card will cover you for accidents up to 90 days after purchase. Theft is covered, too, which is nice if you get mugged on the way home from the Apple Store. There’s a limit of $1,000 per incident and $50,000 in total damages per year.

As for warranties, American Express automatically doubles the term of the manufacturer’s warranty, to a point – you get up to one additional year of warranty coverage for all purchases with a manufacturer’s warrant of five years or less. In other words, if the purchase has a six-month warranty, buying with an Amex card gets you a full year, whereas any warranty of a year or more is simply given an extra year of coverage, unless the original warranty is more than five years. Finally, you also get return protection – if you want to return an item beyond the retailer’s return window, American Express will see to it that you can get a refund up to 90 days after the purchase, capped at $300 per item.

Discover

Discover cardholders are automatically eligible for Discover’s Extended Product Warranty without having to opt in or enroll. That extra protection doubles U.S. manufacturers’ warranties and any purchased warranty up to one additional year, but only on warranties of 36 months or less.

The issuer also offers up to $500 in reimbursement if an item is damaged or stolen within 90 days of the purchase. Check out the full details here.

Visa

Visa only extends purchase protection and warranty coverage to its premium reward card users, which includes Visa Signature, Visa TravelMoney, Visa Reloadable Prepaid and Visa Payroll cards.

Like American Express, purchase protection is valid for 90 days after your purchase, though there’s a limit of just $500 per claim (the cap on damages allowed to a single cardholder is the same, at $50,000). Theft and water damage are both covered.

Holders of these cards also get their warranty period doubled up to an additional year, provided the manufacturer’s warranty is three years or less. But there are loads of exceptions: various types of automobile or boats aren’t covered, nor are hard-wired home improvement items like ceiling fans and garage doors. Computer software and medical equipment is also excluded.

Mastercard

MasterCard’s offerings seem to be about on par with the other cards: The most common benefits package covers damage or theft within 90 of purchase, and your warranty can be doubled by up to a year.

Like Amex, it also has return protection, though the refund value you can get back is capped at $250 per item and you have to return it within 60 days. MasterCard cards are also distinguished by a feature the other two don’t share: price protection. If you find a lower price on an item within 60 days of purchase, MasterCard will reimburse you the difference, regardless of the retailer’s price-match policy.

Since the specific terms vary from card to card, you’ll want to check your cardholder agreement or call the issuing bank for clarity on your card’s terms.

Image: Philip Taylor PT, via Flickr