Most of us know the number one rule for using credit cards is to avoid building up a balance we can’t pay off promptly. What many of us don’t know about credit cards is the number of benefits they often offer (in addition to purchase rewards). Here are some that are common:
Extra security: With fewer retailers accepting checks, remaining options are cards or cash. If cash is lost, it’s often gone forever, whereas you’re not liable for more than $50 in fraudulent charges with a credit card. However, debit card fraud could block other payments from your checking account. If your debit card or pin is lost or stolen, you must let your bank know within two business days of discovering the loss to limit your liability to $50. If you don’t notice fraudulent charges until you view your statement, your liability is limited to $500 – if you contact your bank within 60 days.
Purchase protections: Some cards add an extra year to manufacturers’ warranties if you buy the item with your card. Some companies will reimburse you if a qualified item is lost, damaged or stolen and may even include cellphones. Want to return a purchase past the store’s 30-day return policy? If you used the right card, you may be able to return it up to 90 days or even 120 days. If the price of the item you purchased drops, many cards will reimburse the difference up to 60 – 120 days (within a limit).
Travel bonuses: When you rent a car using the right credit card, you can automatically receive rental car insurance. Certain cards offer reductions on the car rental itself, dining and hotels. Many major credit cards provide roadside assistance. Some will charge you for the service; others will cover costs to a set amount. The right card may include airline discounts, free checked bags and access to the airport lounge, priority boarding and lost luggage protection (with some items excluded).
Benefits differ from card to card. Be sure to read your card benefits guide to see which perks it provides. As with any form of credit, responsible use is crucial. Making your money go farther and protecting your assets is important to us. We can help you evaluate your options for spending, saving and investing your money to support your financial goals.