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Little-known credit card perks

By Jim Wang · Bankrate.com
Monday, April 11, 2011
Posted: 4 pm ET

Credit cards are fantastic tools if you are responsible with credit. Whereas some people compare it to a hammer, a powerful tool when used properly, I like to think of it as a Swiss army knife. Like a Swiss army knife, there are parts of it that you will probably never use as often as the knife itself. However, in times of trouble, you'll be glad those tools are there.

There are several great credit card perks and protections that you probably didn't know about. Let's say you buy a brand new jacket and accidentally rip it on an errant nail. If you purchased it within the last 90 days using an American Express, MasterCard or Visa card, you have purchase protection that will reimburse you the cost of the jacket (or repair of the jacket) at no extra charge.

If you didn't know about that little perk, here are a few more that you might not be aware of:

Price protection
Discover a price drop three days after you buy something? Most stores will usually credit you the difference (since you would otherwise return the product and then purchase it again) but for those cases where you can't,  price protection is there for you. MasterCard and Visa offer 60-day price protection.

Return protection
Did you change your mind about a purchase but the store refused your return? Many cards offer return-and-refund protection for a limited period of time, usually around 60 days. This is great for those times when the store only has a 30-day return policy and you decide on day 31 that you no longer want it.

Warranty extensions
Don't you hate buying something with a one-year warranty only to discover that it breaks on the 366th day? If you made the purchase with a credit card, chances are the card will offer a free extension on the manufacturer's warranty for up to an additional year. Most cards will double the original manufacturer's warranty up to another year at no extra charge. This is another good reason you should skip the extended-warranty pitch at the store.

Auto rental liability insurance
This perk is a little more well known than the others but it's still one that bears repeating. Many credit cards will offer supplemental collision-and-loss insurance that is junior behind your primary auto insurance, if you have it. This means you can likely skip the extensive loss-and-damage waiver, or LDW, insurance that the car rental company loves to sell to you. Some credit cards don't offer this automatically and you'll have to pay extra for this coverage, though it's often cheaper than at the car rental counter.

Purchase protection
Certain cards, like American Express cards, offer purchase protection insurance that protects your purchases from accidental damage or theft for up to 90 days from the date of purchase. It's essentially a short-term insurance policy on each and every purchase you make with their card and it's paid for by the fees the card charges merchants. In the case of American Express, your protection is limited to $1,000 per occurrence and $50,000 per card account per policy year and is secondary insurance. All MasterCard and Visa cards also have this protection, called Purchase Assurance by MasterCard and Purchase Security by Visa.

Baggage insurance policy
Sadly, it's not uncommon for airlines to lose your bags and if you're one of the unlucky few whose bags are never recovered, the amount you can claim is limited by the Aviation Consumer Protection and Enforcement Department of the DOT. If you happen to exceed their limits, you may have recourse with your credit card company. American Express, for example, has a baggage insurance policy that covers up to $1,250 for carry-on luggage and $500 for checked baggage. It's less than the federal limits but it's supplemental, so it's in addition to the federal limits.

What are your favorite hidden perks of credit cards?

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29 Comments
bubba
June 05, 2011 at 11:36 am

Why should I care about my credit rating?

Henry
May 31, 2011 at 11:19 am

Tired of paying 19% interest when you are credit worthy? Why not do what I do. I call a credit card company and say, "what is the rate you are charging me?" They will say something like, "19%".
Then I say, "well do you want to compete with my other credit card which charges me 9% or should I just close this account?" Then they will say something like, "let me check and see what I can do, please hold." The last time I did this, they dropped the rate on purchases for 6 months down to 3% (as in three percent). It works, they know if you close the account, you won't be back.

NESS
May 29, 2011 at 5:31 pm

American express has a great deal. I use their card for my vacation rental and for a flat rate of $25 - that is for the whole amt of time rented and i am fully covered for all accident related charges. So far so good havent had to use it. But American Express is a great card to have. You dont have to be rich or pay a yearly fee to get it either!!

lisa
May 21, 2011 at 8:51 am

When I close a card and have it paid off I have the company send me a letter telling me it is closed. This helped big time when someone stole a credit card (it was closed) and charged something on it. They had to refund it. I have a folder with these closed accounts.

Jonalist
May 04, 2011 at 7:55 pm

Jonalist, what you're smoking is starting to catch up with you. You make no sense at all.

Bea
May 02, 2011 at 7:48 am

I keep getting credit card offers with a variable rate. No Thanks! I'll keep the 2 cards I have that are Fixed at 9%!!!

Jonalist
May 01, 2011 at 5:18 am

Destroy the Credit Card because of the CCV number on the back it is to revealing if anyone wants to tamper they can and you have to devote your time to disclose disclose disclose, so alert their Credit Card Company when you decide to destroy the Credit Card make certain they know you do not possess their Credit Card and cannot use it for your own good, also do not ever request another from them. This can't help drop the high interest rate you have been paying month after month on having received cash once or twice they never accounted for when you made payment, it continues to earn them interest month after month. Eventually they quit listing your purchases beginning at that cash hand out to you & you don't know them so forget their services which sucked from day one now you got them on failure to comply to their own customers needs. File a disclaimer with a law firm and the law firm will remove all the credit they have no record of - guaranteed. Remember each year business destroys their tax records, there goes the proof, your safer than ever, Credit Card Companies & Banks offering them are Insured for a total debt which they can expect regardless and they profited anyway year after year esp when a customer fails to make a monthly payment. Now its your turn - get debt free - that is the ultimate achievement you can attest to.

Sally
April 29, 2011 at 6:18 pm

Just a comment on the car rental coverage. We have just gone through this. We declined the insurance on a rental car and someone backed into us and caused $1800.00 worth of damage to the car. Our car insurance paid for most of it, and some of the rest of it was paid by the credit card company, but they will NOT pay all of it. The car rental company charges for days lost that they can not rent the car and also depreciation on the rental car, because it is devalued because of the accident. Neither your car ins. or the credit card will pay those 2 things. We were stuck with a bill of over $600! I gaurantee you will have to pay some out of pocket if you decline the car rental insurance in case of an accident! From now on we are getting the insurance when we rent! That way you can turn in the car with damage and just walk away.

jim
April 29, 2011 at 6:13 pm

just be smart about your money, because it affects your credit rating. If you don't have the money, don't use somebody elses.