The benefits of having a credit card go well beyond convenience. Using plastic instead of cash affords a number of perks — some big and some small — that can save you a lot of money.
Different credit cards offer different perks, so check the fine print for your card carefully to see what you’re eligible for. Read on to see what credit card perks are out there.
Rewards
This is the most obvious and tangible perk of credit card ownership. For most cards, every dollar you spend earns you a point (or multiple points) that can be used for gift cards, flights, erasing the cost of a purchase and similar savings.
Every card has its own rewards, and some are much better than others. Surprisingly, many people don’t even redeem their points. Cardhub found that $4 billion in credit card reward points go unredeemed annually. Considering the total credit card debt is more than $40 billion nationally, that’s a significant number that goes unused.
Insurance
One of the lesser-known benefits of having a credit card is especially useful for travelers. Some — but not all — credit cards offer decent travel insurance and never really bother informing their customers. If you used a credit card to pay for a flight, for example, you might be covered if you had to make a last-minute cancellation or your luggage was lost.
Rental cars are also covered. All four major credit card companies (Visa, Discover, American Express and Mastercard) offer varying forms of coverage if you rent a car using one of their credit cards. The benefits vary, and not every single card offers insurance, but you could have decent coverage in case of an accident.
Free Admission (Sometimes)
If you’re up for some entertainment, then see if your credit card offers any special discounts or free admission to nearby sights.
Bank of America has a useful “Museums on Us” program where dozens of museums are free on the first weekend of every month. Similarly, Discover cardholders can get five percent cash back at Six Flags amusement parks throughout the U.S. Those are just a couple of examples, as each company is competing to offer better perks.
Return Protection
You might have just bought an expensive gadget or jacket, but the store’s strict return policy means you’re stuck with something you don’t really want anymore. With a credit card, you might be able to get a refund even if you’re past the store’s return date cutoff.
There are a number of stipulations and limitations on this policy, but it does work under the right circumstances and can save you a lot of money.
Price Protection
Another benefit for shoppers is the price protection offered by some cards. If you just made a purchase only to see the item drop in price soon afterward, you can do more than curse your bad timing. Some credit cards will refund you the difference.
Filing a claim isn’t the easiest process, but the benefits could outweigh the time it takes if you bought a big item. Discover, for instance, can refund up to $500 back. Citi customers can get $250 back per purchase and $1,000 total a year.
The Downside
Credit cards are incredibly useful, but they can be a bad thing if used irresponsibly. The average credit card debt per U.S. household is more than $15,000. That kind of debt is difficult to pay off due to high interest rates.
If you only have a couple credit cards and spend within your means, then credit cards are a great tool. If you can’t resist the temptation to spend too much money, however, then maybe credit cards aren’t right for you.
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