Getting a free extended warranty with a Canadian credit card
To say that credit cards make certain things in cardholders’ lives easier would certainly not be an understatement. Not only do they enhance and extend your buying power, they also provide certain bonuses or rewards, ranging from travel savings to free movie tickets.
If you regularly make purchases with your credit card, you might also be aware of extended warranties on certain products. Many credit card issuers provide extended warranty protection for items that are sold with a warranty directly from the manufacturer.
Extended Warranties: Helpful or cash grab?
Warranties and extended warranties sometimes carry a heavy cost. The charge varies from one product to the next, but the standard is usually between 10 and 20 percent of the original purchase price in order to obtain the coverage. While this may seem prohibitive to some, extended warranty coverage does have its benefits.
For example, if you were to purchase a brand-new grey 256GB iPad Air for $729.99 from a retailer, you would be offered a two-year warranty that could cost $60 or more. While helpful on paper, the reality is that retailers make a lot of extra money from customers who opt to purchase warranty plans from them.
But there’s more to the story. Sometimes, the manufacturer’s own warranty system kicks in upon purchase, which can possibly add as much as three years to the original term of the warranty. Hidden features like this can have a negative impact on your wallet.
Having said that, there is still some light at the end of the tunnel. When credit card holders make purchases, the items are sometimes completely covered by the credit card. This helps smart shoppers to potentially save hundreds of dollars on warranty plans. If you’re ever making a big purchase and you’re unsure about whether or not the product has a manufacturer’s warranty, all you have to do is ask.
Extended warranty coverage: A closer look
Before you make a major purchase, it’s important to do your research and find a well-priced product that satisfies your needs. Once you know what you’re after, be sure to review the terms of your credit card to determine if it includes extended warranty coverage. Look for a clause that mentions that card’s coverage doubles or extends the term of the manufacturer’s original warranty.
If the manufacturer’s warranty lasts for two years, that means an additional year of coverage will be added. This can sometimes get complicated if you’re dealing with a manufacturer’s warranty of five or more years. Some credit card providers state that you must register your purchase within a year, which can raise some serious red flags.
To that extent, we have prepared a list of some popular credit cards and the terms of their extended warranties.
| Card | Term |
|---|---|
| BMO Air Miles MasterCard |
Double the warranty period, up to a maximum of 1 year |
| BMO Air Miles World Elite MasterCard |
|
| American Express SimplyCash Card |
- Matched if manufacturer's warranty is less than 2 years - 2 additional years if manufacturer's warranty is between 2 and 5 years |
| American Express Gold Rewards Card |
Are my purchases covered in Canada?
Ensuring your credit card has built-in warranty coverage is often the easy part, but things can sometimes get tricky regarding the items purchased. For example, if you were to purchase a new HD television set in the United States, its warranty might not be recognized in Canada. However, some manufacturers’ warranties provide global coverage, which means your internationally-purchased item will be covered in Canada.
Exceptions to the rule
While there are a significant amount of items that are eligible for extended manufacturer’s warranties, there are others that are not. If you buy a motorized vehicle, such as a car, truck or motorcycle, it will be ineligible for an extended manufacturer’s warranty. The rule still applies regardless of where the vehicle was purchased.
But it’s a different story if the item you bought was used or refurbished. For instance, if you were to buy a used digital camera that had an active warranty, you may still be able to qualify for an extended warranty. However, this depends on the bank that issues your credit card. Used or refurbished items are covered by CIBC and RBC, but they are not covered by BMO, Scotiabank and TD.
Things to remember
- If you don’t already have one, you should consider getting a credit card that includes an extended manufacturer’s warranty.
- It’s best to avoid paying extra for extended warranties in-store. The only instance where you should consider this is if your credit card doesn’t already include it.
- For larger in-store purchases, your credit card is your best bet, especially if it has extended manufacturer’s warranty coverage.
