Credit Card Perks and Benefits
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 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 are also 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.
If you’re already spending with a credit card, 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.
Hidden benefits of credit cards
Here are some little-known rewards that your credit card offers. They’re available to everyone, but you have to ask:
- You get an automatic extended warranty up to 1 year (that means no need to waste money buying extra warranties at Best Buy)
- Automatic car rental insurance and collision insurance (so don’t waste money on this when renting a car)
- Trip-cancellation insurance, so if you get sick before you go on holiday, your credit card company will reimburse any cancellation fees
Check out this video where I discuss the benefits that credit card companies offer on CNBC:
Hidden perks of your credit card – 2:20 video
And as a bonus, here’s where you should be going to get your credit score and free credit report (Hint: It’s NOT the site everyone thinks of when they hear “free credit report”):
How to get your credit score and free credit report – 0:45 video
My articles on specific credit card benefits
- Using your credit card for free rewards from retailers, including Apple, Gap, and Home Depot
- 3 credit card perks you probably didn’t know about. My friend Paul talks about how he uses perks to buy a new iPhone and flat-screen TV.
- More 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.
Full chapter on optimizing your credit cards from my book
My book (available on Amazon) contains a FULL chapter on getting the most benefit out of your credit cards. You can read the whole Chapter 1, “Optimize Your Credit Cards” here, where you’ll see things like:
- Slide 27: Call script to use if you miss a credit card payment
- Page 37: People who waste time chasing zero percent balance transfer games
- Page 38: Student loans and getting out of credit card debt
The chapter also includes strategies to beat credit cards by (1) picking the right credit card and (2) negotiating if they try to screw you, and my most hated pet peeve of all: Why most people focus on minutiae like saving $3 on lattes, but forget *big wins* like optimizing their credit. (See Slide 20 for an example of how your credit will save you hundreds of thousands of dollars — more than any amount of lattes.)
Negotiating credit card fees and charges
- 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.
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 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 2 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.
New tool: Credit Card Payment Calculator
Now, you know you should pay your credit card off in full every month. But if you’re carrying any kind of credit card debt, check out my new credit card payment calculator to see how you can tackle your outstanding credit card balance (or any other debt).
The debt calculator follows the same rules as my book – give it a try and let me know how it works for you.
Try the Credit Card Payment Calculator from I Will Teach You To Be Rich
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