Did you know, for most people, the number one reason for paying with plastic is to earn rewards.
Is this your main use of credit cards?
You may be surprised to learn that your credit card benefits programs – if used strategically – may end up being worth even more than the rewards you earn!
What follows are ten of my favorite benefits.
As a disclaimer to keep the lawyers happy, let me just say that you should consult your card issuer for the rules, limitations, and exclusions surrounding each benefit.
1. Purchase Protection
Did you know that with some credit cards, qualifying purchases are automatically protected for the first 90 days against theft and some forms of accidental damage?
For example, if you bought a new pair of sunglasses and dropped them on the pavement a month later, your credit card company might reimburse you for the damage.
You’ll find this perk on most American Express, Visa Signature, and World MasterCards. But among those, I find that AmEx has the most user-friendly terms and conditions.
2. Extended Warranty
Most cards which offer purchase protection will also provided extended warranty coverage.
What does that mean?
Well, for eligible purchases that come with a manufacturer’s US warranty, this benefit will give you up to double the length of coverage (with a max of one year extra).
So let’s say you bought a new computer that came with a 12 month manufacturer’s warranty for parts and service (which is typical). Then after 18 months, the hard drive crashes (which sadly, is also pretty typical). Call up your credit card’s customer service and file a claim for it – even though your original 12 month warranty expired, they will mirror the coverage during months 13-24.
3. Return Protection
Have you ever tried to return something, only to have the store refuse it?
Last summer this happened to me when I tried to return a shirt (it was too big on me). It just so happened that the store had a 30 day return policy and I was merely 2 days beyond that.
Fortunately, I had purchased it with my AmEx card – I called them up and they reimbursed me the $55 purchase in the form of a statement credit.
The rules for this benefit vary by card issuer, but typically it works like this: If you attempt to return an item in new condition within 60 or 90 days and the merchant refuses, you can get reimbursed for it up to a certain amount (with my card it’s up to $300 per item, with a max of $1,000 annually).
4. Price Protection
This one is probably my least favorite. Why? Because it comes with a lot of rules and exclusions.
But if you’re able to jump through the hoops, this provides coverage on eligible purchases if they drop in price within the first 60 days.
Unfortunately, very few credit cards include this perk. Aside from Citi, the only others I’m aware of are the Chase Sapphire Preferred and Freedom cards. AmEx discontinued their price protection several years ago.
5. Trip Delay Coverage
Being stranded at an airport is never fun. Not only does it waste your time, but also your money. As a captive audience, you’re at the mercy of the airport’s overpriced eateries and convenience stores.
However, if you paid for your trip using a credit card, then the “trip delay” benefit will come in handy.
It reimburses the expenses you have to incur during a delay, such as meals, personal care items, and even a hotel room if necessary.
The bad news? Typically this benefit won’t kick in unless your trip is delayed by 12+ hours and it must be due to a covered event.
6. Baggage Delay Coverage
As you can guess from the name, this provides coverage if your checked luggage is late getting to your destination.
The bad news? Just like the benefit above, this won’t kick in unless your bags are delayed for a significant amount of time.
For example, on the Sapphire Preferred, the delay needs to be 18 hours. After that, Chase will reimburse you for the “emergency purchase” of qualifying items.
7. Lost Luggage Reimbursement
Ever have a bag lost or stolen? Hopefully not – but if it happens – call up your credit card company, because you may be entitled to compensation if you paid for the ticket using their card. The benefit usually covers both carry-ons and checked bags during Common Carrier travel.
Make sure you read the fine print about this, because there are exclusions and the coverage is secondary (meaning they will only pay out if your claim amount exceeds the airline’s coverage).
8. Concierge Service
In a nutshell, this is a 1-800 number that you can call 24/7 to get assistance with things like dinner reservations, planning a trip, shopping for a gift, and just about anything else you can think of.
A decade ago, if you wanted this perk you would have to cough up a whopping $450 fee for the American Express Platinum or another high-end card.
But guess what? Now you will find concierge service on tons of no annual fee cards like the Chase Freedom, Citi Dividend, and Capital One Cash Rewards. All of the Visa Signature and World MasterCards include it.
9. Roadside Assistance
This is a common benefit but be careful, because I find that many card issuers do a poor job explaining how it works.
Typically, the credit card company will only arrange for you to get roadside assistance. The actual cost of the service will still be your responsibility.
On the bright side, even though they’re merely “arranging” it, they do so at pre-negotiated rates. That can save you a lot of money compared to what you would pay on your own.
When I needed a jump start, I called a local towing company who wanted to charge me $120. But by having Visa do it for me, they got it at their negotiated rate of $59.95.
10. Cell Phone Insurance
Last but not least, we come to one of the most unusual benefits you’ll find; cell phone insurance. There used to be a handful of cards which included it, but now there is only one that I know of and that is the Citi Forward (which has no annual fee).
To qualify for this insurance, you have to pay your cell phone bill every month using the Citi Forward card. If you do that, you get automatic protection from damage or theft for up to $250 per claim (with a $50 deductible). That might not be enough money to replace an iPhone, but it certainly will help cushion the blow.
Does your credit cared benefits program have any of these benefits?
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