School is back is session and lots of people are buying new computers. I’m thinking of one myself, to replace my aging 2007 refurbished Mac Mini that cost $400. As an example, the manufacturer’s warranty on a new* Apple Macbook is only one year, unless you pay an extra $250 for AppleCare. (*Still 1-year if you buy refurbished.) A much more economical option is simply to buy it with an American Express credit card. The “Extended Warranty” feature on their consumer cards is pretty generous, with details from their FAQ page:
When you charge the cost of a covered product with your American Express® Card, the Extended Warranty1 will extend the terms of the original manufacturer’s warranty for a period of time equal to the duration of the original manufacturer’s warranty, up to one additional year on warranties of five years or less that are eligible in the U.S.
This means your Apple warranty will have been doubled to 2 years if bought with your AMEX. Be sure to keep as much supporting paperwork as possible, including your original receipt and the warranty information. Some versions of Visa and MasterCard also have an extended warranty feature, but in my experience AMEX is the best at actually paying out when called for. Even the consumer advocate site Consumerist has a tale of AMEX refunding the entire cost of a laptop as part of their extended warranty. I’ve also written before on the AMEX warranty covering a Roomba vacuum. AMEX has some other additional features as well, but I’ll save those for later.
Starwood Preferred Guest Credit Card from American Express
My default rewards card. You get 1 point per $1 spent, and 20,000 Starwood points = 25,000 airline miles (free ticket). Essentially up to 1.25 miles per dollar spent, and you can convert to a variety of airlines or free hotel rooms. Top off an account, or convert a big lump sum. Currently, the sign-up bonus is 10,000 points (worth $100 gift certificate at Amazon.com) after first purchase. On top of that, you can also get an additional 15,000 points by spending $5,000 on the card within the first 6 months. Annual fee is waived for the first year, and is $65 the second year if you keep it.
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I’ve used this same feature on my platinum MasterCard for my projection TV when the video engine quit at like 22 months. I believe Visa signature also provides extended warranty coverage if you don’t have AMEX.
Like scott said, this feature is pretty common among most cards (all 10 of mine, I think). The only catch is that some cards have smaller limits on the length of original warranty: some will add 1 year to warranties of 1 year or less, some will add 1 year to warranties of 3 years or less, and in the case of this Amex, it will add 1 year to warranties of 5 years or less.
The Costco Amex is 2% cash back at restaurants. I don’t know if that is a recent change but it’s a significant change.
This is true for most Visa cards too. Used it a few years back on a DSLR camera that needed repairs 2 months out of manufactures warranty.
Fidelity Investment Rewards AMEX is better than both of those IMO. 2% cash back flat rate on all purchases. Cash is deposited into a fee-free fidelity Checking account every time your 2% earnings surpass the $50 mark; after which you can transfer it into your bank of choice. I still use the costco AMEX for the 3% gas and as a membership card.
You can get a 4% return when you shop at Costco if you have an executive membership and the Fidelity card (2% executive membership + 2%Fidelity reward)
Oh and Fidelity Investment Reward card has no annual fees.
Another cool perk of the Costco AMEX is that it extends a year past any warranty you get at the time of purchase. I just called them to confirm this. Costco already extends the warranty on TV’s and computers to two years, and the Costco AMEX gives you a third year. The rep told me that this is true for any extended warranty coverage as long as it is fewer than five years. Pretty cool!
After looking more deeply, there is a lot of outdated information online about Mastercard/Visa extended warranties. They apparently have gotten better and basically in line with AmEX. As recently as 2005, the maximum claim amount was $1,000 as opposed to $10,000 from AmEx. But now they appear to be the same. And they used to not work on original warranties longer than 1 year, but now appear to match AmEX in that respect as well. I would still ensure that you get the warranty coverage on that little rice-paper thin pamphlet they send you with Visa/MC.
@Matt – Ah yes, you are correct, I always think of the Fidelity card as a Mastercard because mine is an older Mastercard version that also does 2% cashback. Of course, I value my Starwood poitns at more than 2 cents a point so I usually prefer those, but the Fidelity AmEx is indeed one of my favorite rewards cards:
https://www.mymoneyblog.com/my-favorite-rewards-credit-cards/
@Tom – Good tip. I like buying anything I might have to return if defective at Costco if possible, and their extended warranty makes up for the fact that they don’t cover electronics with unlimited returns anymore.
Squaretrade.com has other options.
I think you should just pay cash for the computer this is just another way to suck you in to a credit card offer.
I had this experience too – my fujitsu laptop died right after the 3 year extended warranty expired. I bought a new laptop, and then after a few month was thinking of disposing of the old laptop and then I remembered the Amex warranty!
It was a bit of a hassle having to go get a diagnostic, but at the end I had the full cost refunded. Even better – when I bought the laptop, the cost of the extended warranty and accessories (remember floppy drives?) were bought together and the receipt I had didn’t really break them down. So Amex refunded me for all those expenses too.
Amex charges merchants more than Visa or MC, so the merchants have to pass on the costs to the consumer, so you wind up paying for it in the end.