Making purchases using credit cards usually has more than one perk associated with it. People tend to get so hung up on rewards miles and bonuses that they forget about the smaller, and quieter features provided to consumers by credit issuers. While these benefits rarely make the headline of a card's marketing campaign, these are benefits which can save users hundreds of dollars. But before these features can do that, it is important for consumers to understand they even have these options present. To that end, below are some of the best credit card benefits you might have not known about.
- Purchase Protection - Most major credit card issuers offer insurance on items you purchased using their branded piece of plastic. These benefits are usually capped at a certain amount per item, and given a window of approximately 120 days. Not all cases will be covered, however, so be mindful. Damage and theft are the major occurrences covered by purchase protection benefits. We typically see limits between $500 and $1,000 per item - however, your credit issuer could have different terms and limits. While it is not recommended that you rely on this insurance for items that are truly valuable to you, it is a nice benefit considering you do not have to pay any extra for this added peace of mind.
- Auto Rental Insurance - If you pay for an auto rental using a credit card, you are automatically covered by a basic insurance plan. The benefit is provided to cardholders by MasterCard, Visa, Discover, and American Express networks - your card needs to be affiliated with one of these to be covered. Loss damage waivers - the name given by rental agencies to their coverage - can cost anywhere between $20 and $40 per day. This means using your credit card to be covered can potentially save you a significant amount. Be mindful, however, of what exactly your card company includes in their auto rental insurance policy. For example, most will not cover rentals that occur in most foreign countries (outside of Canada & Mexico).
- Trip Cancellation Insurance - Many financial institutions provide their users with refunds for expenses associated with cancelling flights or hotel bookings. If you have to call off a vacation, chances are you probably have enough on your mind. On top of all your worries, however, airlines and hotel chains can tack on additional fees for cancelling your itineraries. Some card issuers will refund you the cost of those fees, provided your reason to cancel is covered by their terms. While simply changing your mind about the trip won't be covered, things such as severe illness, death, or weather are often considered valid reasons to cancel.
- Roadside Assistance - If your car breaks down, you may be able to call your credit card company instead of a paid tow truck or mechanic. They will provide free or discounted roadside assistance to your vehicle - even if it breaks down in your driveway. Unfortunately, far fewer consumers will have this benefit versus some of the others we've listed here. The most comprehensive features are available to Discover, Visa, and American Express cardholders. Other networks, such as MasterCard, require you to be traveling more than 100 miles or more from your city of residence for the benefit to kick in.
- Fraud Liability Protection - if your credit card information is stolen, you are not on the hook for more than $50 worth of fraudulent purchases. That is the maximum allowable amount a card issuer can charge you in the instance you were the victim of fraud - this is thanks to legislation set forth by the Credit CARD Act of 2009. Better yet, more and more credit card issuers are taking this one step further and offering $0 liability - meaning you will not be charged a single dime if a thief uses your credit card for any purchase.