Credit cards can offer great convenience. Carrying a piece of plastic is easier for most than carrying around a large sum of cash. In addition, many people strategically use their credit cards to take advantage of earning cash back or airline miles, but there are many other credit card perks / ancillary benefits that people might not know about or might not take advantage of. Here are some of my favorite:
The following post is by MPFJ staff writer, Melissa Batai. Melissa is a freelance writer who covers topics ranging from personal finance to business to organics to food. She blogs at Mom’s Plans where she shares her family’s journey to healthier living and paying down debt.
Credit Card Perk # 1 - Extended Warranty
Many credit cards offer extended warranties on products that you buy with your credit card. If you only have a warranty for a year for the product you bought and the product breaks on month 13 (doesn’t that always seem to happen?!), then your credit card may pay the expense if it is one of the many cards that offer up to a one-year extended warranty.
Credit Card Perk # 2 - Car Rental Insurance
When you rent a car, you have the option to buy expensive car insurance from the rental company or to use your own insurance. However, those aren’t your only choices. Some credit cards, namely Chase and American Express, though there may be others, offer primary insurance on rental cars if you pay for the rental with your credit card.
That means if you get in an accident, the credit card company will pay for the repair expenses, rather than your own insurance. If your credit card offers primary insurance, you can bypass the expensive rental car insurance.
Other credit cards offer secondary car insurance, meaning you’ll use your own car insurance, and the credit card car insurance will pick up the amount that your car insurance does not cover. When using this type of coverage, your own car insurance rate will likely increase.
Be aware that some credit cards won’t provide insurance for certain types of vehicles such as trucks or SUVs, so make sure you check to see what your credit card will cover.
Credit Card Perk # 3 -Price Protection
We’ve all had it happen. You buy something say, on Amazon, and a few weeks later you see that the item is now on sale and much cheaper than the price you paid. Some cards offer price protection—the card will refund you the difference in price for what you paid versus what the sales price is if you bought the item on your credit card. Citi Double Cash Card, for instance, offers up to 60 days to get a refund if the price drops, and there is no minimum. You could be refunded as little as $5 or as much as $300 (which is the refund cap). Keeping track of all of this can be challenging, but you can use apps like Earny to monitor this, or you can submit purchase information to the credit card, and they will let you know if the item goes on sale.
Credit Card Perk # 4 -Free Cell Phone Insurance
Cell phones are expensive, and replacing them in case of damage or theft can cost a small fortune. However, some credit cards, including the Wells Fargo Cash Wise card and Chase Ink Business Preferred, offer free replacement insurance on your cell phone if you pay your cell phone bill with the credit card. Wells Fargo Cash Wise offers up to two replacements in a year (with a maximum of $600 replacement costs per phone) with a $25 deductible. Keep in mind most credit cards will not replace the phone if you simply lose it.
Credit Card Perk # 5 -Travel Insurance
Jeremy and Kim booked a four-day trip to Disney, but a hurricane was scheduled to hit the day of their trip, and Disney closed. Jeremy and Kim weren’t worried, though, because they had purchased a travel insurance plan. Sure, the insurance cost them several hundred dollars, but it protected them financially.
However, chances are, if they had done a little more research, they might not have even had to purchase the travel insurance. Many credit cards offer travel insurance; what’s covered depends largely on how plush the credit card is. For example, the Chase Sapphire Reserve card has a $450 annual fee, but up to $10,000 in travel expenses may be reimbursed if the customer isn’t able to take the trip.
You’ll need to check with your own card to see what is covered and what reasons for the cancellation of the trip are covered. Some cards even cover the cost of your travel if you can’t go due to jury duty!
Credit Card Perk # 6 -Free FICO Scores
Some cards, including the Discover card, offer free FICO scores. Every month on your statement, the credit card company will report your FICO score and include a graph that gives a one-year history of the movement (positive or negative) of your FICO score.
Credit Card Perk # 7 -Free Checked Bags
If you have an airline rewards card, one of the unsung ancillary benefits is the free checked bags. Some generous cards such as Citi AAdvantage Executive World Elite and Gold Delta Sky Miles Credit Card from American Express offer not only one free checked bag for the cardholder but also for up to eight other passengers on the reservation. This one benefit alone could save you several hundred dollars for one round-trip flight. If you fly more than once a year, the savings add up considerably.
Credit Card Perk # 8 -No Foreign Transaction Fees
If you travel abroad and use your credit card, you’ll likely be charged a foreign transaction fee of 1 to 3% on every purchase. Depending on the length of your trip and your expenses, this can add up to a considerable financial burden. However, there are several cards that do not charge a foreign transaction fee including Bank of America Travel Rewards Credit card and Chase Sapphire Preferred card, to name a few.
Credit Card Perk # 9 -Free Museum Admission
A select few cards, namely Bank of America and Merrill Lynch, offer free museum admission. On the first full weekend of every month, present your Bank of America card as well as your ID to receive one free admission to over 150 museums across the United States. In my state of Arizona, there are four museums that participate. A more populated state like California offers over 20 free museums that participate.
Other Benefits
Some cards such as American Express offer a slew of smaller ancillary benefits such as free coat check, free gift wrap, free valet parking, access to guest lounges at airports, VIP service at some restaurants and bars, and front of the line service.
Final Thoughts about Ancillary Benefits
There are two important things to remember when it comes to your credit card’s ancillary benefits.
- First, save all your purchase receipts and warranties. You’ll need these documents to take advantage of many of the perks mentioned above.
- Second, many credit cards are reducing their ancillary benefits, so make sure that you call your credit card company to find out exactly what is offered.
If you use credit cards frequently, remember that there is much more to the credit card benefits than just cash back or points accrual. Your credit card may offer many expensive benefits such as cell phone insurance, travel insurance, and rental car insurance that can save you hundreds of dollars a year.
