Many consumers rely on their credit cards for short-term loans or an easy way to pay, maybe even for cash-back rewards. But a lot of popular cards provide consumer benefits and protections that users aren't even aware they have.
To find out what benefits your card provides, start by looking over your credit card’s terms and conditions. Most banks send a benefits guide of some kind in the mail, but you can usually find the same information online.
Note: For most of these services and perks to take effect, cardholders must have made the relevant purchase with that specific card. When that washer you bought with cash breaks down the day after the manufacturer’s warranty expires, don’t expect your credit card issuer to treat you to an extra year of warranty protection. Be aware of the benefits on your different cards, so you can use the right one for each purchase.
Here are some of the most important credit card benefits available today:
This insurance coverage will replace items you purchased with your card that are stolen or accidentally damaged. For example, if you buy a microwave oven with your credit card and drop it when you're setting it up, purchase protection will likely cover it.
This coverage varies by card, so see your card’s benefits guide for the details. A top-tier card might offer coverage for 120 days after a purchase with a cap of $10,000 per claim and an annual limit of $50,000. That’s a lot of broken microwaves.
Although many card issuers are dropping it, some still offer price protection among their benefits. This perk allows you to submit a claim if, for example, that laptop you just bought suddenly takes a $200 price plunge—even at a different retailer. If your claim is valid, your credit card company would issue you a refund for the difference.
Issuers allow different windows for a price drop, but it will usually be no more than 100 days. And while some companies allow you to register your purchase and let them do the monitoring, in most cases, it's the consumer that has to watch for price drops.
This perk extends the manufacturer’s warranty for a set period—usually at least another year and sometimes longer. Terms of the extended warranty will likely match the terms of the original coverage.
For example, you might get an additional 24 months under warranty on eligible items. Coverage is good for the cost to repair or replace the item, up to the amount you paid for it. There may be a specific cap on larger items, so check your policy for details. Be sure you save the original receipt and a copy of the manufacturer's warranty.
Guaranteed return coverage does just what you'd expect. If a store won’t take back an item you paid for with your credit card, this coverage can reimburse you for the amount you paid.
Details vary, but you might expect guaranteed returns on items purchased within 90 days, for up to $300 per item, and with a maximum of $1,000 in claims per calendar year.
Some policies include deductibles (say, $100) and individual claim caps of $600 or so. They will also usually limit the number of claims you may make in a 12-month period.
Auto Rental Collision Damage Waiver
Many credit cards, and especially travel credit cards, offer rental car coverage that is secondary to other insurance you may have. That means the credit card’s coverage will only pay out if your insurance does not cover the loss completely. This coverage can vary in scope, so check the benefits guide.
At least one top-tier card provides primary coverage—it pays out before your own insurance does. This is a rare perk. The coverage amount on that policy is up to a whopping $75,000. Be sure you know your card's policy before you buy the rental company's plan.
Trip Cancellation/Interruption Insurance
This coverage kicks in when a trip paid for with your card is canceled or delayed due to inclement weather, injury, illness, or other factors beyond your control. Many hotel and airline reservations are nonrefundable once your trip gets close enough, so this could be the difference in whether your vacation is sunk or just delayed.
A good example is a policy that will reimburse prepaid, nonrefundable travel expenses in amounts up to $1,500 per person and $6,000 per trip. Find out which of your cards is most generous in this department, and use that one to book your reservations.
Travel Accident Insurance
Many credit cards offer travel accident insurance for you (or your beneficiaries) if you pay for your common carrier fare with your credit card and face loss of life or accidental dismemberment. This coverage may be good for up to $500,000 (and even up to $1 million with some cards), but your exact benefits will depend on your specific injuries.
In a typical policy, for example, you might get up to $500,000 in coverage for loss of life or accidental dismemberment, but only 50% of the policy amount if you lose only one hand or one foot or you lose your sight in one eye instead of both.
Many cards offer protection if your luggage is lost—temporarily or permanently—by a common carrier. If you paid the fare with your card, baggage delay coverage reimburses you for out-of-pocket expenses you may incur while your luggage is delayed. This is typically good for up to $100 per day for a few days while the carrier finds and returns your baggage.
Lost luggage coverage, on the other hand, will reimburse you for the value of any luggage that's permanently lost by the carrier. At least one top-tier travel card covers not only the cardholder but also family members—even if the cardholder isn’t traveling with them.
Free Checked Bag(s)
Many airline co-branded credit cards, and some travel rewards cards, will cover the cost of your checked bag (or bags) when you pay the fare with your card. A few will cover more than one bag and even the bags of your fellow travelers.
Airport Lounge Access
The airport lounge offers a bit of respite from the travel grind, especially if you're a frequent flyer. That comfort usually comes at a premium, though, unless you have the right credit card. Co-branded airline credit cards often gain you free airport lounge access, as do several of the higher value travel rewards cards. Some extend free access to the cardholder’s traveling companion(s), while others charge a fee in the $25-$50 range.
How to Get the Most out of Your Credit Card’s Benefits
These are just some of the most common benefits included with many card policies. Make sure you know the specific perks for each of your cards, so you can get the most out of each one. And remember, none of these will benefit you if you don't make the purchases with your card.