This week’s guest post comes from Bill Hardekopf, CEO of LowCards.com and one of our go-to resources when it comes to credit cards. If you’re in the market for a new card, his site will help you find it.
Credit cards are the object of a lot of criticism due to their high interest rates and fees. But if used properly–paying off your balance in full on time each month–then a credit card is the best way to make a purchase. You can actually make money, thanks to the cash back rewards offered on some cards. But there are also a significant number of perks and protections that you receive for free just for using your credit card.
These benefits are usually found in the welcome packet or listed in the terms and conditions of the card. They vary by issuer and type of card. But some of these perks may astound you.
Here are some of the free benefits that may be available if you make a purchase with your credit card:
Price Protection. Pay attention to the price of the item after you purchase it. If the price drops during a specified time, some issuers may reimburse the difference. MasterCard’s Price Protection offers this for a period of 60 days; Citi Price Rewind offers this for 30 days if the price is at least $25 lower that what you paid. You may have to register the purchase online as well as keep your store and credit card receipts as proof of purchase.
Extended Warranties. Some cards double the manufacturer’s warranty for up to a year. There are limits to the coverage. Save your manufacturer’s warranties and receipts for any purchases that may be covered.
Purchase Protection. The purchased item must have been working when you received or bought it, then stopped working or was damaged. This feature sometimes protects you against theft or accidental damage for up to 90 days from the time of purchase. Some purchases may be excluded and coverage may be limited by occurrence.
Car Rental Loss/Damage Insurance. Using your credit card for a car rental may cover damage incurred when renting the car, so it may not be necessary to purchase extra insurance coverage from the car rental company. Before renting, check the description of this coverage in your Cardmember Agreement. To be covered, you must be the primary renter and decline the collision damage waiver (CDW) or similar option when you are reserving and picking up your rental car.
Travel Accident Insurance. Travel accident insurance provides benefits if you lose limbs or are killed in an accident on a common carrier such as an airplane, ship or train. Coverage ends when you arrive at the place designated on your ticket.
Trip Cancellation Insurance. This protects you against forfeited, nonrefundable and unused payments if your trip is interrupted or cancelled and you have purchased your common carrier tickets with an eligible card.
Lost Luggage Insurance. If your baggage is delayed for at least 12 hours, some cards will give you up to $300 to buy essential items such as toothpaste, a change of clothes, etc.
Travel Emergency Assistance. Most cards offer some type of travel assistance. For instance, American Express cards offer an emergency hotline that helps find a doctor and assist with lost prescriptions. Visa and MasterCard provide medical assistance while traveling and helps you find dentists, doctors or pharmacies. Visa also helps you make all the necessary arrangements for emergency transportation home or to the nearest medical facility.
Roadside Assistance. Some cards offer tire changing, jump-starting, lockout service and fuel delivery. There may be certain conditions on these services and they usually cost.
Security from Unauthorized Purchases. All card companies provide emergency assistance for lost or stolen cards. Under federal law, your maximum liability for unauthorized use of your credit card is $50. If you report the loss before the card is used, the issuer can’t hold you responsible for unauthorized charges. All cards have dispute resolution. If you see a charge on your bill and it is not familiar to you, call the credit card company and dispute that charge.
About Bill: Bill Hardekopf is the CEO of LowCards.com and has been involved in finance for over 12 years, with frequent contributions to Forbes, The Street and The Christian Science Monitor.