Some credit card benefits are obvious.
You can carry a balance if you need to purchase something you can’t afford to pay off in one month (although this isn’t necessary recommended). They also offer rewards like hotel points, airline miles, and cash-back.
But did you know about all the other benefits your credit card probably offers? There are a lot of them, and many people don’t take advantage of these benefits because they aren’t aware. From better fraud protection to rental car insurance, here are some of the lesser known benefits offered by most credit cards.
- Price protection
Some credit cards offer price protection. When the price drops on an item you purchased recently, your credit card issuer refunds you the price difference. Credit cards usually offer 30 day, 60 day, or 90 day price protection, meaning they will refund the difference if the price drop occurs in the first 30, 60, or 90 days after a purchase.
However, the refund doesn’t happen automatically. You have to notice the price drop and file a claim with your credit card issuer, which usually isn’t worth it over a couple dollars here and there. Luckily, there’s a browser extension called Earny that will track any price drops from online retailers you shop at like Amazon and automatically file a price protection claim for you.
All you have to do is wait for the money to show up in your account. This can end up saving you a good chunk of change, especially if you do a lot of online shopping. It’s worth noting that most issuers do have limits on the amount of money you can be refunded, and some limit the amount of claims you can file each year as well.
- Purchase protection
Not the same as price protection, purchase protection offers to protect items you’ve purchased if something happens to go wrong with those items. This can include receiving a faulty model or having the item lost or stolen. Purchase protection is only valid for a short period of time after your purchase, usually 90 days.
Good purchase protection is usually a perk offered by premium cards that come with a significant annual fee. It can really come in handy if, for example, you purchase a laptop and it’s stolen from you just one month later. You can file a claim with your credit card company and have the money you spent on the laptop reimbursed. There are certain restrictions. If you already have an insurance policy that would cover the purchase, you cannot use the purchase protection from your credit card. Furthermore, the theft can’t have been partially your fault, so if you left your front door unlocked and someone broke in and stole your laptop, you’re unlikely to be reimbursed.
- Fraud protection
Many people don’t realize that their credit card offers much better fraud protection than any debit card. This is because there are federal laws in place limiting consumer liability in the case of fraud on credit cards, while there are no such laws in place for debit cards.
These consumer protection laws state that when a consumer reports charges on their credit card that they didn’t make, they can’t be held liable for more than $50. Additionally, many credit cards offer zero consumer liability in which they promise not to hold you liable at all for fraudulent charges made to your account. This is why it’s generally considered safer to use credit cards over debit cards.
- Trip cancellation
Imagine saving up for that dream vacation and then losing it all because you had to cancel it at the last minute.
Travel credit cards offer great perks for frequent flyers, and they can sometimes include trip cancellation and trip interruption protection. A few premium travel credit cards (with premium annual fees) even offer travel insurance. Of course, any expenses you get reimbursed for have to be expenses you charged to your card.
If you miss a flight due to extenuating circumstance and you can’t get reimbursed by the airline, try your credit card. Different credit cards offering varying levels of protection, from covering up to $1,500 of your travel costs to maxing out at $10,000 worth of travel costs.
One of the best credit card issuers for trip protection is Chase. Some of their cards offer up to $5,000 in trip protection, while others offer up to $10,000. Though their premium Chase Sapphire Reserve credit card comes with a steep $450 annual fee, it comes with $10,000 worth of trip cancellation protection as well as $500 for trip delays and baggage delay benefits.
- Rental car insurance
If you pay for a rental car with your credit card, chances are it offers some level of rental car insurance. You must be the primary driver of the rental, and many cards also require that you decline the rental company’s collision damage waiver in order for your credit card rental car insurance to cover anything.
This can save you a lot of money if it means you don’t have to purchase the additional insurance offered by rental car companies. However, make sure you read the terms of the rental car insurance offered by your credit card before saying no to the company’s coverage because some credit cards offer very minimal protection. If you rent cars a lot, look for a credit card that offers primary coverage over secondary coverage. Secondary coverage usually has higher deductibles, and it only goes into effect after your personal car insurance has covered what they’re willing to cover, often rendering it useless. Primary coverage applies before your personal car insurance.
It’s important to keep in mind that most car rental insurance offered by credit cards only covers damage, not liability. This means that if someone else damages or steals your rental car, you are covered, but you’re not covered for any damage you do to another driver’s car. Injuries are not covered at all.
The interest rate is probably the most important factor to pay attention to when choosing a credit card, followed up by the rewards program. However, these benefits can be helpful in helping you decide on a card that’s right for you.