Credit Card Benefits And Perks – Understanding The Value Out Of Your Card
Credit cards are much more than just a form of currency. In addition to the rewards or cash back you earn, the specific credit card benefits and perks available to you can save or provider you thousands of dollars in value annually.
From the bonus categories of your rewards card to free car insurance or extended warranty coverage, understanding the true value of your credit card is key.
Credit cards carry a wide range of potential value, including what’s discussed below:
- Rewards Benefits
- Travel Benefits
- Consumer & Purchasing Benefits
- Other Credit Card Benefits & Perks
As a smart, savvy consumer you can reap these rewards to amazing returns.
However, these benefits are only optimal if you pay off your balance in full each month. If you struggle with credit card debt, focus on that before worrying about rewards or benefits. The net gains from any of these perks is extremely outweighed by paying interest on your outstanding balance.
Be sure to also understand your credit score and how to check it for free.
Please read the fine print on the credit card provider’s website or within the cardholder’s brochure once you receive it. Each card is unique and you need to best understand those specific details to reap the rewards.
The first area of credit card benefits and perks to understand is that different types of rewards available. More specifically, the types of credit card rewards you want to collect.
- Travel Rewards: the most common type of rewards with cards geared toward earning points for a select providers rewards program like American Express Membership Rewards, Chase Ultimate Rewards, etc. These points can then be used on the providers platform or transferred to partnered hotel or airline companies they have relationships with.
- Cash Back: if you prefer cash back, depending on the card, you can generate 1% – 5% back on all eligible purchases. These savings are then applied as a credit statement against your balance.
- Hotel or Airline Rewards: some major chains of hotels and airlines offer credit cards through partnered financial institutions. This can be great way to expedite rewards if you most frequent one provider for your accommodation and travel.
- Loyalty Provider Points: in Canada loyalty providers like SCENE, PC Optimum, Air Miles, Aeroplan and others offer their own credit cards through different banks or financial companies. You accrue points for that provider and redeem them through their portal or in-store for different purchases, benefits or offers.
- No Fee Credit Cards: these are often the lowest tier in terms of credit card benefits and perks. However, there is still value to be had based on the provider and their partners. The premium benefits of other cards generally won’t be available here.
The specific nuances all vary within the mechanics of a unique credit card but the above is a broad template of the most popular types of rewards.
Sign Up Bonus
The most common of the credit card benefits is an introductory sign up bonus. The credit card providers use headline helps to attract attention and then ideally motivate an individual to select that card as opposed to competitors.
These sign up bonuses are offered as points, often tied to a timeline and spending threshold.
Product Sign Up Incentive
In the same realm as the sign up bonus of points above, at times companies will offer a product or other incentive.
Whether it’s a $100 gift card to Amazon or cash back from an aggregation service, it’s just another means for you to get the most value out of your credit card.
First Year Annual Fee Waived
Certain credit card providers will waive the first year of an annual fee (or reduce it) as part of their rewards benefits. This is the ideal scenario as the “best” rewards credit cards carry some sort of nominal annual fee ranging from $59 or $600+.
Your return on investment or net-rewards due to having that fee waived creates a big boost to your ROI. Plus if you’re an active churner you can cancel your card before the next year’s fee kicks in.
Bonus Rewards Multiplier Categories
Outside of the sign up bonus of a bulk of points, the quickest way to earn rewards points will generally come from the bonus multiplier categories. The same can be said for cash back rewards cards and their bonus categories.
For example, the American Express Cobalt (in Canada) offers 5X points on purchases of groceries, restaurants and bars. Therefore, spending $20 generates 100 points on the AMEX platform. In a cash back sense, the Meridian Visa Infinite offers 4% cash back on groceries.
These bonus multipliers will generally focus around food, travel, gas, pharmacy or entertainment.
Other bonuses might come by spending with partner companies of your credit card provider, shopping through the provider’s online portal or in select time periods of boosted rewards.
Free Additional Cards
Another credit card benefit that can be handy is the ability to receive additional cards at no cost. It’s just another avenue to ensure peak rewards with both you and your significant other using the same rewards account on purchases.
Often these can be $50 or $99 per supplemental card, so getting access at $0 to help expedite your rewards is a nice bonus.
Free Checked Bag
As an added benefit, specific providers might offer a free checked bag on your flights with their partnered airline(s). While the overall impact isn’t overly drastic when saving $25 on a bag fee, this is another means to save you money and add to your overall credit card perk opportunities.
Similar to the above, credit card providers may offer access to the private lounges within airports. These are great for layovers or to relax in more secluded space before a flight.
Depending on the tier of your rewards card, this might mean annual access, two free passes a year or a discounted rate to purchase lounge access.
As with any of these credit card benefits and perks, it never hurts to pick up the phone and ask. If you have a six hour layover, calling to ask for free or discounted access (even if it isn’t noted in your benefits) might be doable.
If you like skipping to the front of the line and being the first on the plane to secure your seat and stow your carry on, your credit card benefits and perks might make that a reality.
This is most popular with airline partnered cards but other more premium rewards cards offer this benefit.
Airline credit card providers often allow their members to secure companion passes at deeply discounted rates. These might be an annual feature where you receive 1 companion flight for free or $99 anywhere in North America.
Free Travel Credit
Select airline or hotel providers include the benefit of a free travel credit. The specifics of this might be included as part of your initial sign up bonus or an annual reward for being a member.
Whether its a $100 credit towards a flight or free weekend stay, the cost-savings and benefits can continue to pile up.
With travel comes the potential for monetary risks or loss due to unforeseen circumstances. This might include flight cancellations, baggage theft or other damages.
Specific credit cards will offer this for free and others might provide insurance at a discounted rate. Check the details with your provider to find out what solutions are available to you.
Car Rental Insurance
Another travel rewards perk in our list of credit card benefits, is that most providers offer coverage on car rentals. As opposed to paying the $30 daily fee for loss and damage and then $10 more for extended, you can pocket those savings thanks to your credit card provider having a relationship with an insurance agency that extends to their members.
This is one of the areas that it is extremely important to read the fine print of your credit card provider’s insurance details. The financial implications of car rental insurance and coverage is of course major should an unfortunate situation arise.
Purchase Price Protection
One of the lesser discussed credit card benefits and perks is the purchase protection that most providers offer their members.
For example, if you purchase a new TV for $750 on your credit card and then 2 weeks later it drops to $650, you can leverage your provider’s price protection to get a refund. These are often time constrained protections within a 30, 60 or 90 day window depending on the price or product.
Always save the receipt and monitor the price of bigger items you’ve recently purchased.
Similar to the above, this is another less frequently discussed benefit that credit cards often provide. The extending of manufacturers warranties is a perk that can save you money and hassle should your product (or service) break or become faulty.
By purchasing eligible products with your credit card, you’re often automatically receiving a doubling of the traditional warranty free of charge.
If you’re unsure, give your provider a quick call and ask about the specific product and store you’re purchasing from.
If you’re looking for help booking travel, finding concert tickets, redeeming points or getting the best information on a city you’re travelling to, your card might offer a concierge service.
This can be extremely helpful when redeeming a complex travel hacking trip or tracking down the best options for redemption.
They’re often passionate, experienced people with a deep knowledge of their provider’s systems and partners. Don’t be afraid to pick-up the phone and get their support on anything related to using your credit card benefits or points.
Fraud and identity theft is becoming an increasing concern in this digital age. Whether it’s swiping your information from a magnetic strip of a machine or hacking an account via username/password, protection against these potential threats is a great benefit credit cards provide.
In comparison to your debit card, getting refunded or support from your credit card provider is often easier and more successful. Generally they have more robust fraud protection.
Avid credit card churners and users will note this is another one of the main reasons they try to use their credit card for all purchases.
Most credit card providers have an online shopping portal where you can not only redeem points but also get access to other benefits and perks.
Whether it’s discounted or exclusive access to restaurants, concerts and events or bonus reward points, always check to see what’s available.
In addition to the different benefits and perks above, the potential value of your credit card can still stretch further.
Some additional benefits, depending on your card, could include:
- Global Support Network: 24/7 support around the world.
- No Foreign Transaction Fees: avoid costly fees when using your card abroad or online when purchasing via different currencies.
- Tiered Upgrades: membership services at hotel or airline providers can be boosted by using their cards and provide further benefits.
- Return Policy: similar to extended warranty and price protection, credit cards can also extend the return policy on items bought with the card.
- Credit Monitoring: specific providers offer free access to monitor your credit score and credit report.
- Roadside Vehicle Support: free roadside assistance when experiencing vehicle issues can be another benefit to some credit cards.
This list could be extended based on the specifics of the credit card benefits your specific card provides. Case in point, the amount of value available to you through a credit can is above and beyond what most might expect.
Thankfully there are amazing aggregation services that compile, sort and best compare the different credit cards available. Whether you’re looking for a travel rewards card, cash back card or specific airline provider, you can quickly find and compare cards.
Use the benefits calculators to see how your spending habits might generate rewards. Find the best offers for you and read all the fine print to ensure you’re ending up with the best solution for your needs.
IN CLOSING…CREDIT CARD BENEFITS AND PERKS
A credit card has the opportunity to generate thousands of dollars in rewards, benefits and perks for you each year. If you’re a responsible consumer who can manage multiple cards and never carry a balance, the sky’s the limit.
From free flights and hotel upgrades to warranties and fraud protection.
Understand all the value available to you and you can turn that into some amazing returns.
What credit card benefits do you take advantage of most?
Are there other perks your specific card provides?
Let me know in the comments below.
Here are some other posts to help you take control of your money and life:
- American Express Cobalt Review – Rewards Card For Canadians
- 15 Smart Money Moves You Can Make Today
- Travel Hacking Resource Guide For Americans And Canadians
- 89 Personal Finance Tips – Budget, Save, Make, Invest & Better Manage Your Money
- Understanding Your Credit Score And How To Check It For Free
- 75+ Podcasts To Help Improve Your Life, Finances, Business, Health & More