Credit Card Extended Warranty

What is an extended warranty?

When you purchase an item, there may already be an Australian warranty in place. This is where the manufacturer guarantees it will repair or replace the purchased item if it is found to be faulty within a certain period of time. It usually only lasts a matter of months or a few years.

If you make the purchase with your credit card, you may be eligible for extended warranty insurance. This is a benefit which extends the manufacturer's warranty on eligible purchases on your credit card. While it is offered through your bank, it is backed by a separate insurer like Allianz or Zurich.

The extended warranty does not affect your rights against a manufacturer in the event a law is violated under Australian legislation.

What are the types of extended warranty?

There is only 1 type of extended warranty, but it is the period of the warranty that differs.

• The extended warranty period will match the period of the manufacturer's warranty, starting from when the original warranty ends.
• There is often a maximum of 12 months' additional warranty, but some providers may offer up to 24 months.
• Extended warranty does not apply if the item already has a warranty of 5 or more years. This is also dependent on the provider; for example, Macquarie Bank does not offer buyer's advantage cover for existing warranties of more than 5 years.

For example:

How does extended warranty work?

If you are eligible, the extended warranty from your credit card will begin after the manufacturer's warranty ends. This may take place automatically, but you may also need to register your purchase with the card provider.

There are other factors to consider as well:

• There is often an excess for each claim you make under the extended warranty.
• The item must have been purchased with your credit card.
• You will need to show proof of purchase and your credit card receipt proving you used your card to pay for the item.
• If you purchased additional coverage, you need to show proof of that as well as the manufacturer's warranty.
• If you cancel the credit card you used to make the purchase, the extended warranty will also be voided.
• As well as the above, you will need to fill out a claims form that your credit card company will provide.

How to compare extended warranties

• Excess. You will most likely need to pay a certain amount for each extended warranty insurance claim. This isn't an additional fee charged by the insurer at the time of making a claim, but will be taken out of the amount paid out.
• Claim process. Insurers have similar processes for claiming extended warranty insurance, but some may be more complicated than others. When you apply for your credit card you can enquire with the provider about the steps involved with its extended warranty insurer.
• Limits. The liabilities for claims usually have a limit on the amount you claim within a year, or it has to match the purchase price of the personal goods that were purchased with your credit card.

Pros and cons of extended warranty

Frequently asked questions

• How much am I covered for?

  Credit card providers will typically have a maximum amount they will pay back in a 12-month period as part of their extended warranty. You will need to check the terms and conditions for not only your credit card company but also the exact credit card you have. For example, NAB's original warranty is up to 12 months.

• How much does it cost?

  While extended warranty itself might not cost you anything, there can be an excess fee if you make a claim. This varies depending on the bank, but is usually between $100 and $300 per person per claim. It will be taken out of the cost given back to you. Depending on the original cost of the item you are claiming against, you will need to consider if the claim is worth lodging.

• Can I extend the extended warranty insurance for up to 24 months?

  This depends on the terms and conditions of your extended warranty insurance. Some providers, like Westpac and its subsidiaries, do offer 24 months' extended warranty, as long as your existing warranty is for less than 5 years.

• Are there credit cards with travel insurance and extended warranty insurance?

  It is common for high annual fee and reward credit cards to have both travel insurance and extended warranty insurance. To check, please read our review on the particular credit card you're interested in.

• How do I extend my warranty with American Express?

  You can contact the American Express concierge, or Chubb Insurance to request this.

• How do I extend my warranty with Visa or any other credit card?

  You can contact the insurer of your credit card provider to request this.

Images: Shutterstock

Written by

Rebecca Pike

Senior writer

Rebecca Pike is Finder's senior writer for money. She joined Finder after almost four years writing for business publications in the mortgage and finance industry, including three years as editor of Mortgage Professional Australia. She regularly appears as a money expert on programs like Sunrise and Today, as well as across radio and newspapers. She also holds ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products. See full bio

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