While credit cards can sometimes get a bad rap for high interest rates and fees, there are many benefits to savvy consumers that are unmatched by other payment options. As long as you can pay off your credit card each month, your plastic can be the best way to make purchases. Some benefits of credit cards include:
Purchase protection covers your eligible purchases against theft or accidental damage for up to 90 days after the date of purchase. Items can be reimbursed, replaced or repaired for up to the amount charge. American Express, for example, limits coverage to $1,000 per occurrence and up to $50,000 per cardmember per policy year. Bank of America will reimburse, repair or replace your property up to a maximum of $500 per claim and $50,000 per cardholder in the event of vandalism, theft, fire damage, accidentally discharged water or certain weather conditions. Other cards, such as Chase Sapphire, will reimburse you for the cost of an item if the retailer will not accept a return within the first 90 days of purchase.
Price protection means you will always pay the lowest price for the products that you buy. Most credit card issuers will refund the price difference if you find the same item at a lower cost within a designated time period–generally about 60 days. There are a few caveats. Many issuers will set a limit on the amount that can be refunded, and you must be able to provide the lower price in print, such as an ad in a newspaper, magazine or catalog or an in-store flyer. Usually, Internet prices are excluded. You will also need to have your receipt and the original U.S. warranty that accompanied your product. Some standard exceptions include customized items; internet purchases or ads; items with an available rebate, manufacturer’s coupon or refund; and items listed at a “close out” or “going out of business” sale.
In this category, the Citi Price Rewind is available. If you make a purchase with your Citi credit card, and the price drops more than $25 within 30 days of your purchase, you may qualify for a refund. Chase will refund the difference between the price you paid and the subsequent lower advertised price within 90 days. Purchases made on a Citi business card are not eligible.
Extended Warranty Protection
Many card issuers will provide extended protection that extends the length of the free repair period under the original manufacturer’s warranty by an additional year. Each card is different. For example, Capital One doubles the original warranty period and provides the same coverage as the manufacturer for up to twelve months on most items. Citi duplicates the store or manufacturer warranty for up to 12 months on most items but limits coverage to the repair or replacement of the lowest amount charged to your card, or $10,000. To use your card issuer’s extended warranty protection, you must submit the credit card receipt, store receipt and a copy of the manufacturer’s warranty.
Trip Cancellation and Interruption Coverage
To qualify for trip cancellation and interruption coverage, you must pay for your trip entirely with your card. If you do use vouchers, frequent flier miles or certificates, any remaining trip charges must be paid entirely with your card. Coverage is generally limited to $1,500 per calendar year or the original cost of the ticket, whichever is less.
If your trip is interrupted for any covered reason, which your issuer will list in your cardholder agreement, you will be reimbursed for travel on the carrier to join your group at their current location or return to your destination. There are some exclusions, which include participating in bodily contact sports; pre-existing medical conditions; non-emergency surgery or treatment; and pregnancy or childbirth, unless there are complications. You will only be reimbursed for amounts that are not covered by other indemnity or insurance. Some cards offer this coverage for free, but others may charge a premium for it.
Travel Insurance Coverage
Citi/AAdvantage and Discover cards offer up to $500,000 in flight accident insurance when you fly with a common carrier.
If a covered trip is delayed more than 12 hours due to a covered event, certain expenses incurred due to the delay, including meals and lodging, will be reimbursed.
If you booked with a common carrier and your checked bags are delayed for 18 hours or more, you will be reimbursed for the purchase of covered essential, emergency items.
Lost Luggage Coverage
Lost luggage coverage will cover you and your dependents for permanently lost, stolen or damaged bags that you checked with your carrier, if you purchase common carrier tickets with your credit card. Coverage will only apply after the carrier’s liability coverage is exhausted.
Coverage varies by issuer. American Express, for example, covers up to $1,250 for lost, stolen or damaged carry-on baggage and up to $500 for checked baggage, which is in excess of the carrier’s liability coverage and includes $250 for high-risk items, including computers, electronics and jewelry. Citi covers checked bags up to $3,000 per occurrence per covered person and up to $10,000 total.
Hotel/Motel Burglary Insurance
If you paid for your hotel or motel stay with an eligible card, including MasterCard, you could be reimbursed for any personal property stolen from your hotel or motel room.
Car Rental Loss/Damage Insurance
A number of credit card issuers will cover any damage incurred when renting a car, if you pay for the rental with your card. This means you may not have to pay for the insurance offered by the rental car company, but you will want to check your cardmember agreement before making a final decision. To qualify for the coverage, you need to be the primary renter, and you must decline the collision damage waiver or similar option when it is offered by the rental car company. The coverage is good for the first 30 days of the rental and is in excess of your other insurance coverages. You will be reimbursed only for those expenses that are not covered by other plans.
Coverage is not available in some countries, and typical exclusions include items stolen from inside or outside of the vehicle; the person involved in the loss was not the authorized driver; the loss occurred while driving under the influence or while racing or driving recklessly; there was a blowout or tire/rim damage that was not caused by theft or vandalism and was not the result of a vehicle collision causing tire or rim damage.
A few credit cards offer roadside assistance for gas delivery, lock-outs, jump-starts and tire changes. Fees are usually pre-negotiated and will be charged to your account. You will have to pay for all fees, labor and parts. If you are using a rental vehicle, you will want to call the car rental company before your credit card issuer, as some rental agencies have a specific procedure for emergency road services.
Medical Prescription Replacement Assistance
While the costs are your responsibility, if you have forgotten or lost your medications, some credit card issuers will help you get a new prescription.
Doctor Referral/Emergency Medical Transportation Assistance
If you or a covered family member are injured or become ill while traveling, some credit card issuers will provide you a global referral network of hospitals, pharmacies, dentists and general physicians. They will also help you arrange transportation to the nearest medical facility. However, you will be responsible for all costs associated with transport and care. In the tragic case of someone’s death, the benefit administrator can make arrangements for returning the deceased’s remains home.