Free Extended Warranties? Right There In Your Wallet

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Should you buy extended warranties? I’ve covered the subject before and firmly stand by what I’ve said before:

If you’re thinking about buying an extended warranty, put the money into a savings account instead. You’ve just become your own insurance company. Over time, you’ll spend less on fixing or replacing your own stuff than you would have on warranties, and you’ll never have to argue about whether a particular mishap is covered.

But what if you could get an extended warranty for free? Good deal, right? Well, you can. It’s simple, and requires nothing more than a tool that’s most likely already in your wallet — your credit card. You can smugly tell the Best Buy salesguy about it when you decline his extended warranty.

Charge it

Before I get into the details, let me own up to a little hypocrisy. I’ve always taken my own advice about not wasting money on extended warranties, except when it comes to products made by a certain fruit-themed computer company. The standard Apple warranty is one year. Tripling that to three years for a laptop costs $249. I’ve dutifully ponied up the cash because (a) I break a lot of laptops and figure I’ll come out ahead, and (b) that Jobs guy doesn’t seem to have enough money and I feel sorry for him.

What I didn’t know until recently was that I could turn that one-year standard warranty into a two-year warranty without spending a dime, simply by putting my purchase on almost any major credit card. Visa (V), Mastercard (MA), and American Express (AXP) will all extend a manufacturer’s warranty by up to one year. Naturally, each card’s policy is slightly different. The details:

Visa Warranty Manager: If original warranty is 1 year or less, Visa doubles it. If original warranty is 1 to 3 years, Visa adds an additional year. You can even send a copy of your receipt and warranty info to Visa and they’ll keep it on file for you. Call 800-882-8057 for service within 60 days of product failure.

Mastercard Extended Warranty: If the original warranty is 1 year or less, Mastercard doubles it. If the original warranty is greater than 1 year, no benefit. Call 1-800-622-7747 within 30 days of product failure; you must supply the original receipt and warranty info. The deal also applies to purchases made on a Mastercard Gold Debit card.

American Express: If the original warranty is less than one year, Amex doubles it. If the original warranty is 1 to 5 years, Amex adds an additional year. Call 800-225-3750 “as soon as possible.”

Watch out

Naturally, all is not love and kisses and free warranties in credit card land. There are several gotchas to keep in mind:

Keep your documentation. “You must keep a paper trail,” says Mary Ann Campbell, a spokesperson for IndexCreditCards.com. “You need to have your original receipt and your original warranty.” In the case of Visa’s Warranty Manager, keep a copy of any documents you send them.

Keep the card active. If you charge a toaster on your Mastercard today, cancel the card, and then the toaster breaks, all you get is extended aggravation. In order to file a claim, you have to keep the card open and active.

Don’t split the check. To get the extended warranty on an purchase, you have to put the entire purchase on one card. Online computer vendors, for example, often allow you to split your purchase between two cards. Do so, and you blow your extended warranty coverage.

Read the fine print. Card issuers (banks) can set their own extended warranty policies. Check your issuer’s website. In addition to that, issuers keep a pretty long laundry-list of items that are not covered by their warranty programs, usually including items purchased for professional use, items intended to become part of real estate (for example, a ceiling fan or a window frame), computer software and used, antique or collectible items.

Extended warranty coverage isn’t a headline perk like reward points. You wouldn’t choose your credit card based on its warranty policy. And, by all means, if you revolve a balance, you should not charge your new laptop on a credit card just to get the extended warranty. The free extended warranty is truly free only if you pay your card balances in full each month.

But it’s good to know the policy on the cards in your wallet, so when you do buy a refrigerator and the ice machine breaks, you can make your bank pick up the tab. (And why do ice machines always break, anyway?)

When I bought a new laptop last year, I put it on my Mastercard and skipped the AppleCare. I collected some Amtrak miles and the double warranty and paid the bill right away. Unfortunately, I wasn’t at Best Buy, so the only person I could smugly tell was my wife, who will probably laugh at me when my laptop dies the day after its second birthday.

Matthew Amster-Burton is a personal finance columnist at Mint.com. Find him on Twitter @Mint_Mamster.