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Credit card issuers have traditionally lured in new customers with a dazzling array of perks and benefits, the undisputed stars being cash back, rewards and points. But some of the most dependable perks offered by most issuers, including extended warranties on purchases, price protection and purchase protection, have been quietly marching toward extinction, as Chase and Citi have cut back on the scope of some of these benefits for certain cards, while Discover has done away with them completely. The lone exception has been American Express, which will begin beefing up both its price protection and extended warranties benefits starting Aug. 1.
For the vast majority of credit card users who ignore these side benefits, this announcement by American Express won't be particularly newsworthy. But savvy purchasers will perk up their ears at Amex's pledge to lengthen the maximum time its extended warranty covers from one year to two and the amount of time its purchase protection policy will cover an item from 90 to 120 days after purchase. For those willing to spend the time and effort of putting those perks to work, the difference between using an Amex versus a different card for a purchase could mean hundreds of dollars saved.
What These Perks Do For You
These benefits may not garner the attention showered on rewards and miles, but both can save a lot of money—and headaches—for the card user on specific purchases.
Extended warranties, as you may imagine, act as a warranty on the item purchased with your credit card. Typically this warranty only applies if the item is covered first by a manufacturer's warranty and will cover the item in the same fashion as that warranty. The advantage lies with the term of that warranty being extended beyond the one set by the manufacturer, with the exact amount of time depending on the individual card policy.
Purchase protection covers you in the event the item bought with your card is stolen or damaged within a specific time frame from the purchase, a handy safeguard for the more careless or clumsy customer. Did you just drop that snazzy new iPhone on the parking lot outside of the Apple store? If you used a card with purchase protection to buy the iPhone, you may be in luck provided you file a claim with the card issuer.
Price protection is for situations where you purchase an item with a credit card, only to discover that exact same item is being offered by another merchant at a lower price. Rather than accept the fact that you didn't get the best bargain possible, you submit a claim to your credit card issuer—which usually includes a receipt of the original purchase, a copy of the advertisement touting the same item at a lower price, and a credit card statement—and the issuer will credit you the price difference up to a certain limit defined by the card's individual policy.
Who Uses These Perks?
The terms and circumstances governing extended warranties and price protection depends on the individual card, but in general they only apply to a specific range of purchases. For example, items commonly excluded from price protection by most cards are:
- Boats, cars, aircraft or any other motorized land, air or water vehicles
- Food, drinks gas or medications
- Jewelry including loose gems, precious stones, metals and pearls
- Tickets for shows, flights, concerts and sporting events
- Collectables such as antiques, coins, art or stamps
Although a whole ecosystem of apps and websites have sprung up to help make it easy for you to compare prices of items purchased with your card, the time and effort it still takes to file a price protection claim means you probably don't want to bother getting a discount on a $20 desk lamp selling for $15 at IKEA. However for more expensive purchases such as appliances or electronics, price protection could mean the difference between paying $900 for that television (for example) and $700.
Extended warranties and purchase protection provide peace of mind if you've made an expensive purchase that you're worried about replacing if lost or damaged. If that new fridge happens to go on the fritz a day after the manufacturer's warranty expires, or someone pickpockets your new Samsung Galaxy, these benefits help make sure you get back on your feet in a hurry.
American Express's commitment to its extended warranty and purchase protection policies make it an attractive option for users worried about losing big-ticket items to damage and theft. And as other credit card issuers cut back on these side benefits and others, users should take a long, hard look at their spending habits before choosing which card to take out of their wallets for a purchase.
The article, American Express Stands Alone in Doubling Down on Benefits , originally appeared on ValuePenguin.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
