1/24/2014 4:00 PM ET|
3 card benefits you pay for but don't use
What good are the perks in your credit card agreements if you ignore them?
It certainly isn’t difficult to waste money with a credit card. Are you paying for a gym membership you don’t use, or subscribing to a larger Netflix plan than what you need? Or maybe you buy food items in bulk to save money, only to discard uncooked items when they spoil before you have the opportunity to prepare them.
These unnecessary expenses are easy to eliminate because once you start looking at your spending, the services you pay for without using stand out and may even cause you some frustration. Not all unused expenses are obvious, though, especially when it comes to credit card benefits.
How cardholders pay for credit card rewards and benefits
The best credit cards offer quiet features and benefits designed to attract and satisfy spenders. Through higher interest rates, as well as higher fees for merchants that are passed on to cardholders, consumers end up paying for these membership privileges. There’s no line-item at the end of the month showing how much each customer pays for each benefit, but these services cost issuers money, and that money comes from its customers.
The good news is that it’s not too difficult to take advantage of some of the better benefits, although issuers will generally require customers jump through a couple of hoops. Here are three of the most helpful but overlooked benefits of many credit cards. Be sure to check your agreement to see if your card offers these features, and check in advance before you apply for any new credit cards.
1. Purchase price protection
If your card offers purchase price protection, you will be able to receive a refund of the difference between the price you paid for an item and a lower advertised price within a certain time frame, usually either 30 or 60 days.
Most shoppers have the tendency to forget about shopping for an item once it has been purchased. Prices fluctuate all the time, and most people won’t notice if they already possess the product. Using a card with this benefit reduces the risk of overpaying, but only if the buyer continues to monitor prices.
The best way to find out whether your card offers purchase price protection is to call the customer service phone number on the back of the card, particularly if you don’t like looking through your files and reading your customer agreement. It used to be almost guaranteed that an American Express card would offer this benefit, but today, few do. Visa Signature cards generally offer purchase price protection, as do many cards from MasterCard.
You can get help monitoring price changes using the PriceProtectr app, but you may need to keep in mind that, depending on the rules of the plan offered with your card, you’ll need a print advertisement to qualify for the price protection guarantee.
2. Purchase protection
In general, manufacturer warranties don’t cover accidental damage or stolen property. Unless there is a problem with the manufacturing or shipping process, like a defective part or something obviously damaged in transit, you have no recourse with the manufacturer or retailer. Drop your new camera, and unless you purchased a special plan from the retailer that’s usually too expensive, you’re on your own.
Many credit cards offer automatic purchase protection for certain products. On some American Express cards, for example, the products you buy are protected against accidental damage and theft for 90 days following the date of purchase. In many cases, consumers would be tempted to replace the item without realizing their credit card may take care of that expense.
If you think you might be covered when a stroke of bad luck takes a product or its functionality away from you, call the issuer to clarify the terms of coverage. You will likely need to complete several forms and wait some time for the replacement, but in many cases, this is still preferable to replacing the item yourself.
3. Extended warranties
If your credit card offers extended warranties, and many do, your purchases are automatically covered for an additional amount of time over and above the manufacturer’s warranty. This feature alone makes those expensive extended warranties sold by retailers when, for example, you buy an expensive electronic device, seem like a waste of money. Often, they provide the same coverage and charge you a significant amount of money.
You might not be aware that your credit card offers this benefit for free. And if you do need to submit a claim, the process of dealing with your credit card issuer might be easier than dealing with the retailer.
This service often automatically doubles the term of your manufacturer’s warranty, up to one additional year. If the item is covered for 90 days, your credit card will add another 90 days. If the manufacturer’s warranty doesn’t expire until the end of the first year of owning the product, the credit card will add a second year. As with the other coverage types, you’ll need to check with the issuer to determine the terms and conditions of coverage.
Although some credit card issuers make it more difficult than others to use these benefits, their existence costs issuers money. You’re helping fund these programs every time you pay a late fee or pay interest, or even every time you swipe your card.
Since even the most diligent credit card users, paying those credit card bills in full every month, are helping the issuers cover the costs for people taking advantage of these benefits, you might as well use them when the option presents itself.
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VIDEO ON MSN MONEY
they ask ''you want miles ?'' you want rewards ?'' you want cash back ? ''
just give me a lower interest rate, I'm tired of paying through thr teeth for ''programs'' that only cost all of us more......higher rates and fees to pay the program's administrative and implimentation costs.
( did you notice they somehow never get around to giving me my lower interest rate )
work work work so hard to earn credit and credibility as a representation of your character keep it and cherish it as a measure of your responsibility as for extra fees most of the time these can be dealt with directly involving no third party
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