You're Covered: Canadian Credit Cards With The Best Extended Warranties

One of the hidden perks of shopping with a credit card is that many cards offer Extended Warranty Protection for purchases that  come with an original manufacturer’s warranty.

Considering that many retailers charge from 10% to 20% of the purchase price to get extended warranty coverage, there’s tons of value in these cardholder benefits. All you have to do is go to BestBuy.ca and you’ll see that a Compaq computer retailing for $401.19 will offer and additional two year warranty for $99. Talk about margin! The sad truth is, the manufacturer likely already has a warranty, and your credit card likely extends the original warranty, sometimes by as much as 3 years.

So the next time someone at Best Buy, Staples, Future Shop, The Brick or Leon’s offers you an additional warranty, just remember, if you pay for the entire purchase with your credit card, you’re likely already covered and can save yourself a few hundred dollars, if there’s an original manufacturer’s warranty… just ask.

In that vain, we conducted a survey to determine which of the major Canadian credit card issuers offered the best Extended Warranty Coverages. We did so by measuring the length of coverage, area of coverage and the ease of getting items covered.

Length of Extended Warranty Coverage:

Many issuers will offer an Extended Warranty for a term that reads “this coverage doubles the original manufacturer’s warranty period up to a maximum of one additional year.” What that really means is, if the Manufacturer’s Warranty is for 24 months, you’ll be covered for an additional 12 months for a total of 36 months. One tricky area here is if your Manufacturer’s Warranty is for 5 years or more. Many issuers will require that you register the item within the first year of purchase, which in our opinion is a little shady. Here’s the list of credit cards by extended coverage length:

• 3 Years Extended Coverage: CIBC Visa Infinite Privilege
• 2 Years Extended Coverage: TD Visa Infinite Privilege, RBC Visa Infinite Privilege, CIBC MC World and World Elite
• 1 Year Extended Coverage: A bunch of other credit cards extend the Manufacturer’s Warranty by up to 1 year, including many of the most popular like the American Express Gold, American Express Simply Cash (no fee), BMO Air Miles (no fee), BMO World Elite, Scotia Momentum Infinite, Scotia Amex Gold, MBNA Platinum Plus (no fee), MBNA Smart Cash (no fee), RBC Avion, CIBC Aventura, & TD Aeroplan.

Area of Coverage:

Some issuers will only cover you if your item has a warranty that’s valid in Canada. So if you buy a camera in Florida, and it happens not to have a warranty that’s valid in Canada you’ll be out of luck. That said, many international companies like Sony will have warranties that cover the globe, but certainly not everyone does. Here’s a list of the countries each of the banks will cover:

• Canadian & US Warranty Coverage: All CIBC and Scotiabank credit cards with Extended Warranty coverage
• Canada Only Warranty Coverage: TD, RBC, BMO

Exclusions:

Not all items will be eligible for extended manufacturer warranty. In all cases motorized vehicles (cars, trucks, boats, motorcycles, and snowmobiles) will not be covered. The one area you will see some difference is in the treatment of used and refurbished items. Considering that so many of us (sometimes without us even knowing) now buy refurbished phones and computers with manufacturer warranties, there is value here that can be offered by some policies versus others. Here’s a list of credit card issuers that cover used and refurbished goods:

• Cover Used & Refurbished Goods: CIBC, RBC
• Do Not Cover Used & Refurbished Goods: TD, BMO, Scotia

Key Lessons:

1. Never buy extended manufacturer warranties from your retail store unless you know you don’t already have it on your credit card
2. Always use your credit card with extended manufacturers warranty coverage when buying a big ticket item (electronics, appliances, furniture, instruments and tools)
3. Get at least one credit card that has extended manufacturers warranty coverage, it doesn’t have to have an annual fee.