Don't Forget to Use These Credit Card Benefits
You might be missing out if you ignore the many purchase- and travel-related benefits that credit cards offer.
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There are a few credit card benefits that nearly every cardholder knows about. For example, many cards offer points, miles or cash back rewards when you use the card, and you won't be responsible for unauthorized purchases if someone steals your card. Paying your monthly bill on time can also help you build a positive credit history and improve your FICO® Score.
However, there are also cardholder benefits that aren't as well-known but could help you save money. Look into your current cards' benefit guides to see if you already have access to any of these benefits and the terms and conditions that may apply. And consider which benefits you may want access to the next time you apply for a new card.
Purchase protection
Purchase protection can reimburse you if an item you buy with your credit card is stolen or damaged. The coverage generally lasts 90 to 120 days and the benefit will reimburse you for replacing or repairing your item, up to a per-claim maximum. It can offer peace of mind, especially when you're making a large purchase, but the coverage may also be secondary. Meaning, you may need to file a claim with your renters or homeowners insurance first, and then use the credit card purchase protection to get reimbursed for any uncovered portion of your primary claim.
Return protection
Return protection allows you to return a product you purchased with the credit card even if the retailer won't accept your return. When you use the benefit, you'll still need to return your item, but you'll send it to wherever the card issuer requests rather than the original retailer. There's also still a return window, which generally ranges from 60 to 90 days, and there may be a limit to how much money you can get back. Still, it can be helpful when you're shopping at a store that has a short (or no) return period.
Extended warranties
The credit card extended warranty benefit will generally extend the manufacturer's warranty on eligible items that you buy. Depending on the card, the warranty period may either be doubled up to a maximum of one additional year, or extended by a year for items that have a longer warranty. Extended warranties can be especially helpful if inflation is leading to rising prices for new goods, but certain purchases, such as computers, may be excluded.
Cell phone insurance
Cell phone insurance has become an increasingly common benefit that could save you and your family a lot of money. If you pay your monthly bill with your credit card, all the phones that are part of your plan could be covered by the insurance, which can reimburse you if your phone is damaged or stolen. The specifics can vary, but there's generally a deductible, per claim limit and annual limit. For example, you may have to pay a $50 limit and can get up to $600 towards repairs or a replacement, but can only receive up to $1,200 in a 12-month period.
Travel-related benefits
There are many travel-related benefits that can be especially important to know about when your trip doesn't go as planned:
- Cancellation, interruption and delay insurance: Can help cover the cost of food, transportation and a hotel if you have extra expenses because your original plans are delayed. You also may be able to get reimbursed if your trip is canceled or cut short because of a covered incident, such as severe weather or jury duty.
- Lost luggage and baggage delay insurance: Get money for personal items while you're waiting for your bags if they're delayed, or reimbursed for lost, damaged or stolen items if your bags are damaged or don't show up at all.
- Accident insurance: Offers compensation for an accidental death or the loss of a limb, sight, speech or hearing during a covered trip.
- Emergency evacuation and transportation: Can pay for emergency transportation and medical services if you're injured while traveling.
- Roadside assistance: Can help connect you with a local roadside dispatch and may cover the cost or give you a guaranteed flat-rate for services, such as a jumpstart or towing.
Rental car insurance
Rental car insurance is also a common travel-related benefit, but many people don't fully understand the fine print. Generally, the coverage is similar to the collision damage waiver (CDW) you can purchase from a rental agency, which only covers theft of and damage to the rental car. The insurance won't cover those costs if you get in an accident and hurt someone or their property.
You may also need to decline the rental agency's CDW coverage to receive the credit card benefit. And the credit card benefit may be secondary insurance—you'll need to file a claim with your auto insurance first. There are some credit cards that offer primary collision damage coverage, which can save you a lot compared to buying a CDW policy, but you may still need to have or buy liability coverage.
Review the terms carefully
While many cards offer these types of benefits, the specifics can vary depending on your card and its terms and conditions. Read over them closely to make sure you keep the correct supporting documents (such as a receipt for a purchase) and that your claims will be covered. Once you understand each card's benefits, you'll know which will be the best option for each purchase.
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Louis DeNicola is a finance writer based in Oakland, California. He specializes in consumer credit, personal finance, and small business finance, and loves helping people find ways to save money. In addition to FICO, Louis works with a variety of financial services firms, credit bureaus, and educational websites, including LendingTree, Credit Karma, and Experian.