While reward points are the most known perk of using a credit, credit cards have more to offer than just rewards. Many credit cards come with all kinds of benefits tailored to fit your needs. From extended warranty for items purchased with your card to roadside assistance for rental cars, it’s important to know what exactly your credit card offers so you can cash in on these benefits or find a card that better meets your needs. For each one we offer our thoughts on how to compare this benefit against mileage/points/cash rewards.
With this benefit, the credit card issuer guarantees to refund the cost of an item purchased with your card if the retailer refuses to accept it. This one is hard to quantify. If you think you’re buying something that you may want to return and the only way you can return it is by using a particular card, this is probably worth 2 to 3% of the purchase price. But you’ll really need to make a judgement call on this type of perk.
The extended warranty benefit is offered by many credit cards in addition to the manufacturer’s warranty. The warranty is generally offered up to 12 months and for items value at a maximum of $10,000. American Express even offers extended warranties on refurbished items purchased with your credit card. It is important to save proof of purchase, including receipts, credit card statements, and copies of the original manufacturer’s warranty in order to use the extended warranty benefit. If you are making an electronics purchase, you definitely should factor this one into your purchase decision. We typically think this is worth roughly 10% of the purchase price.
This benefit protects customers against theft, breakage, or loss of items purchased with your credit card. Several credit card companies, like MasterCard and Visa cover purchases for theft and breakage within 90 days. Again, if you’re making a sizable purchase and theft or breakage is a concern, this is one you’ll want to consider. It’s usually 90 day coverage, so we don’t think this is as valuable as an extended warranty, but figure 1.5 to 2.5% of your purchase price for items where you’d like to have this extra protection.
Credit card companies typically require that you pay for a trip with the credit card that offers the benefit in order to claim these benefits. Some credit card companies limit benefits to airfare paid in full with the credit card, which means no frequent flier miles can be used in order to receive the benefit. Additionally, some credit card companies restrict the benefit to the primary cardholder and dependents.
No Currency Conversion Fees
This benefit can save you the 1-3% fee typically added to convert other forms of currency to American dollars when using your credit card abroad. If you are overseas, and you have a 0% conversion fee card, you should consider this to be equivalent to a 2 to 3% reward since most cards charge in this range.
This benefit typically specifically includes:
- Travel Assistance - Some credit cards will coordinate services for emergency situations like lost luggage tracking, emergency cash transfers, and medical or legal assistance.
- Trip Cancelation Insurance - This benefit reimburses you the cost of nonrefundable flights if an emergency or illness cancels your travel plans. If this emergency leaves you stranded, some credit cards will also reimburse you the cost of meals and hotels during your inconvenience.
- Lost Luggage Reimbursement- You could be reimbursed for all luggage and its contents or a maximum amount per luggage with this benefit.
Car Rental Insurance
Many credit card companies will offer car insurance for rental cards paid in full with your credit card, but companies vary widely in the amount they will cover and their stipulations for coverage. Some will only cover collision and only up to a certain amount. Other cards offer insurance for other situations like bodily harm and theft. American Express offers a secondary coverage with a higher maximum payout for a fee. If you are renting a car you almost always should use a card that offers some form of car insurance. It’s worth typically at least $20 per day.
If you find a lower price on an item you recently purchased, this benefit will pay you the difference. There is usually a maximum payout and a time limit (typically 90 days) from the date of purchase. This is very hard to quantify, but for big ticket items like appliances it can be worth as much as 2 or 3% of your purchase price.
This benefit allows you to call for assistance in the event of a flat tired, you’re locked out, your battery is dead, or if you need a tow truck . Credit card companies typically limit the number of miles your vehicle can be towed for free using the benefit. They may also charge you a flat fee for the service and do not usually cover the cost of parts or replacement keys. This is not typically tied to a purchase, so just make sure you have a card that offers this service if you are not a member of AAA.
While the rest of the world uses a microchip for transmitting credit card data, the U.S. uses a different technology — the magnetic strip. This can cause issues when traveling abroad, but not if you use a credit card with EMV acceptance. EMV stands for Europay MasterCard and Visa. This means that some cards offer the added benefit of using both Europe’s secure microchip for transmitting data as well as the magnetic strip, which allows you to easily use your MasterCard or Visa internationally. You don’t attach a value to EMV acceptance since if you don’t have it you cannot use your card in many countries. If you are traveling abroad just make sure one of your cards is EMV enabled. The good news is this technology should be coming to the US soon and we at Reward Summit think it cannot happen soon enough!
No two cards are alike so it is important that you not only check with your credit card company to determine if they offer these benefits, but also read the fine print carefully to full understand exclusions and limitations, as well as when they apply.