Credit Card Education Guide

The Benefits of Using a Credit Card

Convenience is one of the most obvious advantages of using credit cards instead of cash, but there are a lot of other perks associated with your credit card that may be hidden in the terms and conditions.

As long as you have the discipline to pay of your credit card balance in full every month and not spend more than you otherwise would have using cash, it is worth exploring these credit card perks and take advantage of the offers that are a part of your credit card agreement at no cost to you.

Purchase Protection

If you are unsatisfied with an item and the merchant does not want to take it back, your credit card provider may offer a full refund up to a certain amount. Your items could also be protected against theft or accidental damage for as much as 90 days from the date of purchase.

Most credit card issuers also offer extended warranty on your purchase. That means they are willing to extend your warranty for up to one additional year. This is automatically included in your purchase and should anything happen during the extended warranty period you need to file a claim with the credit card issuer.

Fraud Protection

Under federal law your maximum liability is $50 per card should your card be used for unauthorized or fraudulent purchases, but major credit card issuers go the extra step and you won´t be held responsible for any charges, however you do need to report the loss or theft immediately to the credit card company.

Price protection

If you buy something and see the exact same item advertised for less within a 60 day period you will receive a refund for the difference. There can be a lot of restrictions associated with this offer, such as excluding internet purchases and certain items.

This feature is becoming increasingly difficult to find and are usually only offered on credit cards that charge an annual fee.

Auto Rental Insurance

You can save the costly insurance offered by car rental companies and replace it with a free insurance through your credit card provider. The coverage from your credit card replaces the collision damage waiver (CDW). Rental of premium vehicles and other restrictions may apply, so it is wise to read the fine print on your credit card agreement before declining the CDW on your car rental contract.

Travel Benefits

Your credit card also comes with a variety of travel benefits. Your full fare may be covered through the cancellation insurance in the event your trip is cancelled or interrupted. Your checked baggage is covered from theft or if the airline loses the baggage. The emergency assistance service provides referrals to doctors, lawyers and other emergencies. There is also an automatic travel accident insurance at no extra cost, which can be as high as $1,000,000, just by charging the ticket on your credit card.

Credit History

This is a benefit that comes with every unsecured credit card and while it may be intangible it can be very valuable. Every credit card issuer reports your payment history to the credit bureaus and is used to determine your credit worthiness on future applications for credit. If you have a long credit history with no blemishes you are able to get lower interest rates on your installment credit and better credit card offers.

Be Careful

Remember that most of these benefits are subject to change and reviewing the credit card terms on a regular basis is recommended. The coverage of each benefit varies depending on the credit card company and when comparing credit cards it should be included as a part of your decision making. It can prove to be a costly mistake if the insurance and protection is not on the same level as other credit cards.