Credit card cover makes extended warranties 'a waste of money'

Extended warranties sold by stores and manufacturers may be a waste of money given that many credit cards offer such cover as a bonus, a commentator has said.

Lesley Parker, a finance columnist for the Sydney Morning Herald, noted that under the Trade Practices Act, consumers have the right to a refund, replacement or repair if a product doesn’t last as long as they would reasonably expect – regardless of the length of the guarantee in the manufacturer’s ’’express’’ warranty.

"A credit card plan may offer an additional year’s warranty on top of the manufacturer’s warranty but in some cases may even double the warranty, up to specified limits," the writer added.

However, consumers were urged to compare credit cards and ensure they are receiving this benefit before making any decisions about warranties.

It was observed that while the cover does not come with all credit cards, it is usually attached to a premium card such as a gold or platinum card.

"And while there’s no additional cost for the warranty, you do pay an annual fee for these sorts of cards – and sometimes quite a high one," said the commentator.

Writing for Coolum News recently, Noel Whittaker, a director at the financial consultancy Whittaker Macnaught, said that Australians should check the fine print when transferring their credit card debt to a low interest card.

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