With the largest gift-buying time of the year fast approaching, a recent experience reminded me that the method used to pay for a purchase can be an important decision.

Specifically, some credit cards, debit cards and prepaid cards provide free extended warranties and short-term theft or damage coverage on many of the things you might buy. But others do not.

Free theft and damage coverage is a particularly good benefit, and itís one thatís often overlooked when choosing a credit, debit or prepaid card.

For example, imagine that you purchase a new cellphone for someone, and four days later that someone falls into a lake with that phone in his pocket, damaging the phone beyond repair. Thatís what happened to me, and hereís what happened next:

I knew I had purchased that phone with an American Express card, which comes with ďpurchase protectionĒ for 90 days. In general, that means if you buy something and it gets accidentally damaged, or it gets stolen, theyíll repair or replace it with no deductible.

You break it, they buy it.

It sounds too good to be true, but Iíve used this feature twice during the past three years. Both times involved items that cost less than $100 and were accidentally broken.

Each time, I just called an 800-number, I was asked some details about what happened, and my account was credited for the purchase price of the broken item. Then I bought a replacement.

If I had bought that phone with a different card, I might have been out of luck. Store-affiliated credit cards, in particular, often donít include those benefits.

Not all theft and damage coverage is the same. Some policies have limitations or deductibles. If youíre wondering whether the plastic you carry has such coverage, the easiest thing to do if you donít have the information in writing is to call the toll-free number on the card and ask.

Now, it generally doesnít make good financial sense to buy something with a credit card unless youíre going to pay off the card balance on time and in full in order to avoid interest charges. But if youíre not going to end up paying interest charges, and you can get a nice feature such as purchase protection, then it does make good sense to pull out the plastic instead of using cash.

Likewise, most major credit cards, and some debit and pre-paid cards, offer free extended warranties, often adding as much as a year to the warranty of something you buy.

Some extended warranty plans are better than others. I havenít had occasion to use extended warranty coverage associated with a credit card, but I think itís safe to say that those plans are better than having no free extended warranty.

Unlike theft and accidental damage coverage, which is typically in force for just 90 days, an extended warranty might not be needed for years, so it could require some good record-keeping. For example, you might need to pull up receipts for that laptop computer five years after you bought it.

I find that it makes the most sense to pay attention to things such as purchase protection when Iím buying something that comes with a higher-than-usual chance of getting stolen or broken. Small consumer electronics would be right at the top of that list, particularly when they are being purchased for younger people.

Reach David Slade at 937-5552 or Twitter @DSladeNews.