Credit card benefits and perks
Credit cards are like a delightful gift from heaven.
If you pay your bill on time, they’re actually a free, short-term loan. They help keep track of your spending much more easily than cash, and they let you download your transaction history for free.
Most offer excellent credit card benefits such as free warranty extensions on your purchases and free car rental insurance. In fact, your credit card could provide over $1,000 of benefits you probably don’t even know about.
But credit cards can also be convenient enemies. Almost everyone has a bad story about late fees or overspending, so “Cut them all up!” becomes an easy battle cry for people who don’t realize the benefits of multiple sources of credit.
The truth about credit cards lies somewhere in the middle. As long as you manage them well, they’re worth having. But don’t pay them off completely, or miss a payment, and you’ll end up owing an enormous amount of interest.
That’s why you should know how to squeeze the credit card companies for everything they’re worth — without paying unnecessary fees or charges. And you should learn how to negotiate down your APR, as well as other tips to save you thousands of dollars.
- 4 hidden credit card benefits and perks
- Credit card companies: Your personal army
- Negotiating credit card fees
- Paul Singh’s favorite American Express perks
4 hidden credit card benefits and perks
Just like with things like car insurance, you can get great deals on your credit when you’re a responsible customer.
In fact, if you have very GOOD credit, you’ll be able to take advantage of a lot more perks than if you had bad credit.
NOTE: If you don’t know what your credit score is, check out my article on credit scores and reports to find yours today.
If your credit score is good, you should call your credit cards and lenders once per year to ask them what advantages you’re eligible for. Often, they can waive fees, extend credit, and give you private promotions that others don’t have access to. Call them up and use this script:
“Hi there. I just checked my credit and noticed that I have a 750 credit score, which is great. I’ve been a customer of yours for the last X years, so I’m wondering what special promotions and offers you have for me. I’m thinking things along the line of fee waivers and special offers that you use for customer retention.”
Credit cards also offer rewards programs that give you cash back, airline tickets, and other benefits, but most people don’t take advantage of all the free stuff they can get.
For example, when I had to fly to a wedding in an obscure town in Wisconsin, I redeemed my credit card’s travel reward to save more than $6,000 on the flight.
That’s an easy one, but there’s better: Did you know that credit cards automatically give you amazing consumer protection? Here are four credit card benefits you might not know about:
- Automatic warranty doubling. Most cards extend the warranty on your purchases. So if you buy an iPod and it breaks after Apple’s warranty expires, your credit card will still cover it up to an additional year. This is true for nearly every credit card for nearly every purchase, automatically.
- Car rental insurance. If you rent a car, don’t let them bully you into getting the extra collision insurance. It’s completely worthless! You already have coverage through your car insurance plus your credit card will usually back you up to $50,000.
- Trip cancellation insurance. If you book tickets for a vacation and then get sick and can’t travel, your airline will charge you hefty fees to rebook your ticket. Just call your credit card and ask for the trip cancellation insurance to kick in, and they’ll cover those change fees — usually up to $1,000 per year.
- Concierge services. When I couldn’t find LA Philharmonic tickets last year, I called my credit card and asked the concierge to try and find some. He called me back in two days with tickets. They charged me through the nose, but he was able to get them when nobody else could.
For these reasons I put almost all of my purchases on a credit card — especially large ones. Call your credit card company and ask them to send you a full list of their rewards.
Check out this video where I discuss the benefits that credit card companies offer on CNBC:
And as a bonus, here’s where you should be going to get your credit score and free credit report:
Credit card companies: Your personal army
Another credit card benefit you’re probably not aware of is your personal army.
No, you’re not invading Russia in winter anytime soon, Napoleon. I’m talking about your credit card company fighting on your behalf.
For example, I decided to cancel my cell phone plan a while back.
When I called, though, I was informed by account had a $160 charge.
“For what?” I asked. Wait for it…
“An early cancellation fee.”
First off, I knew I had already negotiated out of an early cancellation fee a long time before that call. (Some cell phone companies make a lot of money from pulling shady moves like this, hoping customers get frustrated, give up, and just pay.)
Secondly, ever since the same cell phone company tried ripping me off a few years before, I started keeping records of every single phone conversation I’d had with them (more on that later). That came in handy when the customer service rep — though very polite — insisted she couldn’t really do anything to erase the charge.
OH REALLY?? So I pulled out the notes I had taken the previous year and politely read them aloud to her.
As soon as I read them, a miraculous thing happened: She suddenly had the ability to waive the fee. Within two minutes, my account was supposedly cleared and I was off the phone.
Wow. Amazing! All I had to do was meticulously detail our transactions the year before and explain to the company how they screwed up!
However, that’s not the end of the story. Even though they told me that they wouldn’t charge me, THEY STILL DID IT ANYWAY.
By this point, I was so fed up, I decided to call in the big guns (i.e. my credit card company).
Many people don’t know this, but credit cards offer excellent consumer protection. This is one reason I encourage everyone to make big purchases on their credit card.
So I called my credit card company and told them I wanted to dispute a charge. They said, “Sure, what’s your address and what’s the amount?” When I told them about my experience with the cell phone company, they instantly gave me a temporary credit for the amount and told me to mail in a form with my complaint, which I did.
Two weeks later, the complaint was totally resolved in my favor.
Why am I telling you this? Because you need to know that your credit card company is on your side when it comes to disputes. In fact, the credit card company fights the merchant for you.
My articles on specific credit card benefits
For even MORE credit card benefits, check out my three articles below. They’re some of my best resources for getting the most out of your credit cards.
- Best travel credit card (according to the Points Guy). We asked Brian Kelly (aka Points Guy) what his favorite travel credit card is AND to show you how to get one yourself.
- My favorite credit card. Wherein I show you my absolute favorite credit card and all of its awesome benefits.
- Other credit card perks you didn’t know about. Includes a scan of a credit card benefits sheet with benefits like concierge, rental insurance, and price protection.
Negotiating credit card fees and charges
While perks that are offered by your credit card company are great, sometimes you have to get your hands dirty to really optimize your credit cards.
And that means doing my favorite thing: Negotiations.
Below are two of my best resources for credit card negotiations:
- Reader lowers his APR by 5.75% using my negotiation scripts. This is the first thing you should do if you’re carrying a credit card balance.
- Get your credit card’s annual fee waived. You shouldn’t be paying an annual fee – call your bank and get them to waive it.
Use them only if you want some BIG Wins.
Paul Singh’s favorite American Express perks
My friend Paul Singh (of the productivity blog resultsjunkies.com) was telling me about some interesting perks from his credit card, so I asked him to write it up for everyone. I don’t have strong feelings one way or another about AmEx, but these are great examples of some of the benefits that your credit card probably offers — but you don’t know about.
Note: His annual fee is enough to make me stuff my head in a plastic bag and tie it closed with adamantium, but you have most of these perks on your credit card for free.
In Paul’s own words:
“In case you didn’t know already, all AmEx cards come with something they call Return Protection:
- No More Shopping Regrets. Return Protection offers guaranteed product satisfaction on designated items purchased entirely with an eligible American Express® Card.
- 90 Days of Protection. If you try to return an eligible item purchased in the U.S. within 90 days from the date of purchase and the merchant won’t take it back, American Express will refund the purchase price.
- Up to $300 Coverage. You are covered for up to $300 per item, excluding shipping and handling, up to $1,000 annually per card account.
I’m planning on using this for an iPhone I bought for my wife two weeks ago (assuming the new iPhone is available within 90 days of the purchase date). They’ve got a few other nice perks with their personal cards.
Also, I really like the free extended warranties – I used that on a $5K TV I bought last year and it’s nice to know that I’m covered for an extra year after the factory warranty runs out – for free. On top of that, all the travel coverages are awesome – I lost my card in Vegas last month and they overnighted me a new Platinum card. To make sure I could still party it up, they offered to have the hotel concierge drop off some AmEx travelers checks to my room within an hour.
The way I look at it, I pay $600 ($450 for mine and $150 my wife’s) per year for the Platinum Card – that’s $50/month. I get all the free coverages I talked about up above, some additional Platinum-level goodies (like airport lounge access, free complimentary airline tickets and more) and a 24/7/365 concierge that will do my bidding.
Remember, you don’t need to pay a huge amount to get these benefits. Most credit cards, including yours, come with standard benefits, including a complimentary extended warranty of an extra year on electronic purchases (e.g., laptops and cellphones — most people don’t know about this!). They also offer automatic car-rental insurance, plus the ability to dispute charges if you got a lemon from a retailer.”