Most consumers are unaware of the fact that the credit cards they carry around each day can be used for a lot more than simple purchases and rewards. There are many perks and features that aren’t advertised very well by banks. As a result, most people tend to under utilize their credit card. Everyone who has a card in their wallet should take a few minutes out of their day to closely go over their cardmember agreement. That’s where you can find these types hidden features laid out. In this guide we'll go over some of the best kept secrets consumers should be on a lookout for.
Online Shopping Portals
Shopaholics enjoy credit cards mainly due to the savings they can produce through their rewards. Whether it’s through points, miles, or cash back the average user can typically shave off between 2% and 5% of the total cost of in-store purchases. However, did you know you can sometimes use your card's online shopping portal to get twice or three times as many rewards? Many of the major U.S. card issuers have shopping portals set up on their online interface. They partner with certain stores and services to allow their customers to shop through the site. It’s not uncommon for the rewards rate on this type of shopping to hit 10% to 15% -- significantly higher than what you’d normally get in-store. The only downside to this approach is that it’s not good for people who prefer to make purchases in-person. If you’re the type of shopper who likes to examine an item physically before buying it, this won’t be something that appeals to you.
A handful of credit cards come with a benefit that will refund you in the event you buy something and it immediately goes on sale afterwards. Any frequent shopper knows the frustration introduced by this nightmare-scenario. This benefit will differ from card-to-card. Some offer coverage for 60 days after the date of the original transactions, while others extend to 90 or even 120 days. Don’t rely on this benefit without familiarizing yourself with the exact terms listed in your credit card contract. You’ll find that most banks have a big list of exemptions that won’t be covered. This typically includes things like event tickets, or anything else that is subject to high price volatility.
Your level of involvement in the refund process will also differ from card-to-card. While some issuers will scan online for prices automatically, others expect you to do the research yourself. If your card does the latter, you will be responsible for submitting a claim and gathering all the required evidence.
Rental Car Insurance
If you’ve ever rented a car, you’ve certainly been offered a collision damage waiver by the rental agency. Those who pay for the rental using a credit card and decline the rental agency may be automatically covered by their card issuer. You should note that cards typically only offer secondary collision coverage. This means if you have a personal auto insurance policy, you need to first file a claim through your insurer. Whatever isn’t covered will be picked up by your secondary policy. In contrast, a policy you’d buy directly from the rental agency is typically primary. This has one advantage you should be aware of. Since you may avoid filing a claim with your auto insurer, your rates are less likely to go up as a result of an accident.
The other caveat that’s important to understand is that credit card policies do not provide liability coverage. Therefore, if you are sued as a result of an accident, the policy will not pay for court fees. You can purchase extra liability coverage from the rental company without voiding your credit card’s collision coverage.
Theft and Damage Protection
Credit cards are increasingly including theft and damage protection as a perk without advertising it too much. If an item you bought with a card breaks or is stolen, the issuer may reimburse you up to a certain limit. This benefit is usually capped at around $600 to $800. This coverage kicks in when the store you bought the item from refuses to give you a refund. Just like with price protection, theft and damage insurance comes with a timeframe on how long it remains active for. This number will differ from state to state and card to card. The most common coverage amount lasts approximately 90 days.
Some cards also throw in an extended warranty, which works along the same lines. If an item you bought comes with a 1-4 year manufacturer’s warranty, the credit card company may throw in an extra year your way. This usually comes with a hard cap of 5 years.