You’re probably familiar with some of the most popular credit card reward programs. Maybe you’ve earned enough air miles or points using your card to take your family on a once-in-a-lifetime vacation, or you’re eagerly anticipating how you’ll spend the cash back you earn on certain purchases. But those aren’t the only perks that come with using your cards responsibly.
Knowing the ins and outs of your credit cards can help you make the most of all of their benefits. Credit cards offer more than purchasing power and rewards. Today’s cards also are packed with advantages that can protect your purchases, safeguard your finances and provide peace of mind while traveling, which are all benefits that can surprisingly improve your financial well-being.
This guide will walk you through some of the not-so-well-known benefits of some credit cards.
Purchase protection and extended warranties: Safeguarding your purchases
One of the most valuable yet often overlooked advantage of certain credit cards is the built-in protection they offer. From purchase protection to extended warranties, your credit card may be the first line of defense when something goes wrong with a purchase.
Purchase protection
Think of purchase protection like short-term insurance for the items you purchase using your credit card. If your eligible item is stolen, damaged or lost within a set period of time after you buy it and your credit card offers purchase protection, you can submit a claim to be reimbursed.
The coverage amount and protection window might vary based on your credit card, and some cards exclude certain purchases. But this benefit can save you hundreds, if not thousands, and offers peace of mind when using your credit card to purchase expensive items like electronics or home appliances.
Extended warranties
Next time you’re asked if you’d like to add the extended warranty to a purchase, it might make more financial sense to say no. Many credit cards offer extended warranties on some items at no extra charge.
This benefit can provide an extra year or two of coverage, saving you from having to buy expensive extended warranties from retailers. Just make sure you hold onto your receipts and a copy of the manufacturer’s warranty, because you might need them if you file a claim with your credit card company.
Return protection
It’s not unusual to make a purchase only to realize once you get it home that it’s not quite what you want. You decide to return it and get your money back, but life happens. It’s very easy to get busy or forget to take the item back to the store, and suddenly you’ve missed the store’s window for returns.
But some credit cards offer return protection, allowing you to return items within a specific time frame even if you’ve passed the store’s return period. Your credit card issuer may give you a refund even if the retailer refuses to take the item back, which can help ensure you don’t get stuck with items you don't want or need.
Fraud protection and zero liability: Protecting your finances
Credit cards protect your finances by warning you about fraud and unauthorized transactions. Most issuers go above and beyond with advanced fraud detection and real-time alerts.
Fraud monitoring and alerts
Credit card issuers are monitoring transactions for suspicious activity around the clock, like unusual transactions that don’t fit your normal spending patterns and purchases above a certain amount or made overseas. If anything seems out of the ordinary, you’ll receive an alert via text, email or app notification, depending on your preference. This proactive monitoring can help catch fraud before it becomes a bigger issue, saving both you and the credit card company money and stress. It can also help if you learn how to identify and avoid scams and fraud.
Zero liability policy
One of the standout benefits of using certain credit cards over other payment methods is a zero liability policy. This means that you won’t be held responsible for unauthorized transactions. If your card is lost or stolen and someone uses it to make fraudulent purchases, you won’t lose any money as long as you report the theft or loss promptly.
Identity theft protection
According to a Federal Trade Commission report, credit card fraud is routinely one of the most common forms of identity theft. To combat this issue, many credit cards offer identity theft protection services like fraud alerts and restoration services.
Most also offer credit monitoring and will alert you if your credit score changes drastically, which could indicate fraud. Some cards even notify you if your Social Security number is found on the dark web or on websites that sell your personal information. In today’s digital age, when data breaches are all too common, this added layer of protection can be invaluable.
Travel benefits: Peace of mind on the go
Credit cards are excellent travel companions, offering a range of benefits that can make your trips more comfortable and secure. From travel insurance to trip cancellation coverage, these perks can save you money and stress during your journeys.
Travel insurance and protection
If something goes wrong on your trip, like a medical emergency while traveling abroad, your vacation might be ruined, and you might be out a lot of money for flights, hotels, unexpected medical bills and more. But many credit cards include travel insurance that covers a variety of situations, from illness to repair bills after a rental car accident. This benefit can save you from incurring significant out-of-pocket expenses while away from home if you book your travel using your credit card.
Trip cancellation and interruption coverage
Life happens, and sometimes trips need to be canceled or cut short due to unforeseen circumstances like illness or severe weather. Credit cards that offer trip cancellation and interruption coverage may reimburse you for prepaid, non-refundable expenses, ensuring you don’t lose money on canceled plans.
If your trip on a common carrier is delayed, your card might cover meals, hotels and transportation while you wait for your flight, up to a certain amount per ticket. Keep in mind that the covered reasons vary by card, so you’ll want to make sure you understand what’s eligible for reimbursement.
Lost luggage reimbursement
Nothing can ruin a vacation faster than realizing you made it to your destination, but your luggage didn’t. If your bags don’t arrive when you do, your credit card may reimburse you the cost of new clothes or personal items like toiletries that you need while you wait to be reunited with your luggage. If your bags are lost or damaged by a carrier, or if items have been stolen from your bag during transit, your credit card provider might reimburse you the cost of your lost belongings.
Other consumer-centric credit card benefits
In addition to traditional travel and fraud protections, some credit cards offer extra benefits designed to protect you in various aspects of life, making credit cards indispensable tools for savvy consumers.
Price protection
It can be frustrating to purchase an item only to see the price drop the next week. With price protection, your credit card issuer can refund you the difference if you find the same item for a lower price within a specific time frame, usually 30 to 90 days after purchase. Some cards don’t even require the lower price to be offered by the same retailer.
Not many cards offer price protection, and it can be a hassle to track price drops and provide proof of the lower price, but it can be worth it for large purchase like appliances.
Cell phone protection
More credit cards now offer cell phone protection as a benefit for those who pay their cell phone bill with the eligible credit card. If your phone is damaged, lost or stolen, your credit card issuer might cover the cost of repairs or replacement. This is especially useful because it could help you save money by not purchasing your phone carrier’s insurance plan while still getting coverage.
Rental car insurance
Whether on travel or if you frequently rent cars, a credit card that offers rental car insurance can be invaluable. Purchasing insurance from the rental agency can be expensive and may not give you the full coverage you need.
Coverage from your credit card issuer can provide primary or secondary coverage for rental car damages in case of an accident or theft. Check to see if your card has any requirements for coverage, like turning down the rental insurance from the agency.
Concierge services
Many premium credit cards offer 24/7 concierge service, acting as a personal assistant for cardholders. Whether you need help booking a last-minute restaurant reservation, planning a vacation or securing tickets to a sold-out event, your credit card’s concierge service can save you time and effort.
Credit card rewards: The icing on the cake
While the consumer protections and financial safeguards are crucial, the allure of credit cards often lies in their reward programs. Whether you're earning cash back, airline miles or hotel points, credit card rewards can provide substantial value.
Cash back rewards
Cash back rewards are one of the simplest and most popular types of credit card rewards. You’ll earn a percentage back on eligible purchases every time you use your credit card.
Some cards offer extra cash back on certain types of purchases, like groceries or gas. With other cards, you can redeem that money as statement credits or convert them to points to use for other types of purchases or rewards.
It’s important to remember, though, that this isn’t really “free” money. Cash back rates typically range from 1% to 5%, so you’ll still be paying for the majority of your purchase.
Travel rewards
For frequent travelers, a travel rewards credit card is an excellent way to accumulate airline miles or hotel points. Once you have accrued enough miles or points, you can redeem them for free flights, hotel stays or other travel-related perks.
This can make your trips more affordable or make it easier to take the whole family on a once-in-a-lifetime getaway, but you’ll typically need to earn 10,000 to 15,000 for one round-trip flight, so it may take you a while to earn enough points to cover the whole trip.
Some airlines also limit which flights or dates can be booked using points, so check for limitations before you try to rely on points for your next vacation.
Card networks
Beyond cash back and travel rewards, many credit cards offer additional perks through the card networks themselves, such as Visa®, Mastercard® or American Express®.
These network-specific benefits often include services like roadside assistance, emergency travel services, additional travel perks, exclusive access to events and special offers from partner retailers.
Depending on the network, you may also receive protections such as global customer assistance, extended warranty programs and even access to luxury hotel collections. These benefits add another layer of value to owning a credit card.
Choosing the right credit card for your needs
With so many credit cards on the market, choosing the right one can be overwhelming. There is no one-size-fits-all credit card, but by comparing your spending habits to reward programs, prioritizing consumer protections and considering rates and fees, you can find a card that best suits your needs.
Prioritize consumer protection
When selecting a card, look for robust consumer protection benefits such as purchase protection, fraud monitoring and extended warranties. These features can save you money and provide peace of mind in case something goes wrong.
Assess the reward programs
Think about your spending habits and what types of rewards would benefit you the most. If you travel frequently, a card that offers travel rewards and perks may be ideal. For everyday spending, cash back rewards can help you save on routine purchases.
Keep an eye on interest rates and annual fees
While many credit cards come with great perks, some also come with high annual fees and interest rates. Weigh the value of the card's benefits against the cost of the annual fees and interest rate, especially if you plan on carrying a balance. A high interest rate or steep annual fees could quickly outweigh any of the rewards you earn.
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