Updated on 06.16.15

Eight Hidden Benefits of Credit Cards

Credit cards in wallet

Valuable perks like price protection or extended warranties may be hiding in your wallet. Photo: Jeff Rose

In 2013, Lance Cothern and his fiancé, Victoria, purchased a $250 wedding dress from a retailer based in China. Unfortunately, while the dress arrived intact, it wasn’t exactly what the pair had hoped for.

“She loved the dress she saw in the picture,” explains Lance, who writes at MoneyManifesto.com. “Unfortunately, the dress that arrived at our home didn’t look anything like the dress we purchased online.”

Although the Cotherns initially thought all hope was lost, they called the number on the back of their credit card to see if they had any recourse. What they found out surprised them.

“The credit card company told us that we could file a fraud claim for the dress as long as we showed that the picture of the dress we ordered and a picture of the actual dress looked nothing alike,” said Lance.

So they sent Chase a picture of the dress they received, plus a picture of the dress they thought they were buying. Meanwhile, they also submitted a fraud resolution form and affidavit at the request of the bank. This step resulted in a $250 credit on their account while Chase sorted out the details with the online dress retailer.

The final result: Since the Chinese dressmaker chose not to dispute the Cothern’s claim, they were able to keep the dress and the $250 credit. They later sold the dress in a garage sale for $25.

Hidden Credit Card Perks Hardly Anyone Knows About

The Cotherns were lucky. Even though they didn’t know it at the time, the Chase credit card they were using had extended coverage for misrepresented or fraudulent purchases. The Cotherns also learned a huge lesson from the whole ordeal.

“Since the dress fiasco, we realized credit cards offer a lot of hidden perks,” says Lance. “We pay more attention to the benefits each card offers when we make large purchases like new furniture or a vacation to protect ourselves the best we can. Hopefully we don’t have to use these benefits again, but it is nice to know they are there if we need them.”

The problem? Unlike credit card rewards, which are advertised ad nauseum, many of the best perks are rarely mentioned by card issuers. Instead, they’re often buried in the fine print or not mentioned at all.

So, how do you find out what your credit card offers? Unfortunately, the only way to find out may be to conduct some research on your own. In most cases, that task should involve reading your own card’s terms and conditions and exploring new card options online. Once you get started, here are some hidden perks you should look for:

Perk 1: Zero Liability

Most credit cards, including those from Chase and Discover, offer a zero liability policy for fraudulent credit card charges. According to the Fair Credit Billing Act (FCBA), you can only be liable for up to $50 in fraudulent credit card charges anyway – certain issuers just take it a step further.

How it works: According to the Federal Trade Commission, “Your liability for unauthorized use of your credit card tops out at $50. However, if you report the loss before your credit card is used, the FCBA says you are not responsible for any charges you didn’t authorize. If your credit card number is stolen, but not the card, you are not liable for unauthorized use.”

How it works in real life: If someone steals your credit card or credit card number, or if you notice transactions on your account that you didn’t make, you simply need to call your card issuer and file a claim. In most cases, your bank will issue you a credit while they conduct an investigation. If you truly are a victim of fraud, this process should be rather painless. However, you may be required to submit documentation or sign an affidavit.

Perk 2: Primary Rental Car Coverage

While some credit cards offer free secondary rental car coverage, also known as the Collision Damage Waiver (CDW) that you can use in addition to your own personal auto policy, many others offer primary rental car coverage.

While CDW protects you from getting sued by your rental car company if you get in an accident or the car is subject to theft or vandalism, it often comes with a deductible and may not provide comprehensive coverage at all. Primary rental car coverage, on the other hand, provides comprehensive coverage that can be used in place of your regular car insurance if you get in an accident.

How it works: Although primary rental car coverage is offered for free in many cases, certain cards offer primary rental coverage for a low flat-rate fee as well. Whenever Lee Huff of BaldThoughts.com rents a car, for example, he pays for the rental with an American Express card enrolled in the American Express Premium Car Rental Protection.

“This insurance is a flat rate (rather than the daily charge from the car rental agency) for as low as $19.95 for up to 42 consecutive days of coverage,” says Lee. “It serves as primary coverage for theft and damage to the rental vehicle, with no deductible.” Liability coverage is not available, however.

How it works in real life: If you have a card that offers free primary rental car coverage, all you need to do is use that card any time you pick up a rental car. If you wind up needing the coverage, you’ll file your claim through your card issuer who will handle all of the details for you.

Perk 3: Price Protection

Some cards offer price protection for large purchases such as stereo equipment, furniture, or appliances.

With Citi Price Rewind, for example, all you need to do is enter your receipt details into their system and wait – if a better price is found within 60 days, you’ll be notified. According to Citi, they issued almost 25,000 refunds from January to March 2015, with the average refund coming out to $31.73. While other cards offer similar price protection perks, Citi Price Rewind is the most popular.

How it works: With Citi Price Rewind, you can get up to $300 back per item, up to $1,200 per year, but you had to have used a Citi card for your purchase in order for it to qualify.

However, Citi does all of the digging for you and will notify you if a lower price is found. With other programs, you’ll need to keep an eye on sales yourself and submit a claim proving that you found the same item at a lower price – usually within 60 days. In some cases, online sales, seasonal sales, and close-put prices are ineligible.

How it works in real life: Use a card with price protection when making large purchases where a sale price in the next 60 days could result in a huge refund. While some price protection programs only offer coverage on certain types of purchases, others like Citi Price Rewind offer the benefit on nearly anything.

Perk #4: Extended Warranties

What happens when you buy a new smartphone and it dies exactly one day after its one-year warranty is up? If you used a credit card with extended warranty coverage to purchase it, you may be able to score a full refund – or a new phone.

Fortunately, Visa, MasterCard, Discover, and American Express all offer similar extended warranties for products purchased with their cards, and this coverage adds up to an extra year of warranty protection. The best part is, all of this additional coverage is free.

How it works: When something you buy bites the dust outside of its manufacturer warranty, you may be able to turn to your credit card for help provided you used the card to make the purchase in the first place. While each card issuer offers its own terms and conditions, they all offer repairs and replacement up to $10,000 with a maximum annual benefit of up to $50,000.

How it works in real life: Use a card with extended warranty coverage for any purchase you might want an extended warranty on. If your item breaks, your card issuer could decide to repair it, replace it, or reimburse you. The process may require you to send in extensive documentation and even the product itself. It can also take many weeks to secure a resolution.

Perk #5: Trip Cancellation/Trip Delay Coverage

Although this hidden perk is less common, several cards offer trip cancellation or trip delay coverage. The most generous benefits generally come from Chase. This coverage can come in handy if your flight is cancelled due to inclement weather or a natural disaster, or if an emergency or illness puts your trip on hold.

While some cards offer this perk for free, other cards, such as those from American Express, require a fee of up to $9.95 per person, per trip.

How it works: Trip cancellation or trip delay coverage typically comes into play when bad weather strikes, an airplane is grounded for any reason, or you experience the death of a family member or a prolonged illness that makes travel impossible.

How it works in real life: Use a card that offers trip cancellation insurance for all of your travel plans. Then make sure to keep any and all paperwork that might have anything to do with your initial travel plans.

In order to successfully file a claim, you’ll need as much detail and proof as possible. If your cancellation was due to an illness, for example, you may even need a doctor’s note.

Perk #6: Emergency Travel Assistance

What happens when you’re traveling abroad and get into a bind or lose your luggage? If you have a card with emergency travel insurance, you may be able to call on your card issuer for help.

Benefits can vary. With American Express emergency travel assistance, for example, phone operators can intervene to help locate lost luggage, get you in touch with family members, or help you make alternate travel plans. Meanwhile, AmEx baggage insurance provides up to $500 for lost checked baggage and up to $1,250 for lost, stolen, or damaged carry-on luggage.

How it works: Using emergency travel assistance is as simple as calling the number on the back of your credit card. Depending on your situation, they will put you in touch with a concierge or emergency travel assistance representative. This coverage usually kicks in only when you’re away from home, so don’t plan on using it locally.

How it works in real life: Emergency travel assistance representatives can work wonders on your behalf, but they can’t work miracles. And although their services are free, you may be on the hook for additional charges that result from your emergency situation. In order to qualify for emergency travel assistance, you need to have used your card to pay for the trip you’re on as well.

Perk #7: Protection from Foreign Transaction Fees

When you’re traveling abroad, you should always have a few credit cards in addition to any cash you’re carrying. However, many people don’t realize that certain credit cards come without foreign transaction fees, making the currency exchange absolutely free.

Since currency exchange kiosks typically charge a commission and cards that do charge foreign transaction fees can charge up to 3% for every purchase, this perk can save you a bundle over the course of your travels.

How it works: When you carry a card with no foreign transaction fees, you can make purchases abroad without paying for the conversion into the local currency. This can help you save money in two ways. First, it can save you the trouble and expense that comes with exchanging all of your paper money into the local currency. And second, it can save you from crooked retailers who might try to convert the currency into your home currency in a fraudulent way.

How it works in real life: When traveling abroad, simply use a card with no foreign transaction fees for all of your credit purchases. To avoid becoming victim to a currency scam, you should insist that all purchases are rung up in the local currency with the marked or negotiated price.

Perk #8: Free FICO Scores

We all know how important a good credit score is, but that doesn’t mean that everyone knows how to monitor their own. Fortunately, several card issuers have begun offering free FICO scores on their monthly statements, with the most popular being the Discover brand.

How it works: Getting your free FICO score is easy with a card that offers this perk. Simply sign up for a card with this benefit and you’ll be able to track your FICO score on your statement each month.

How it works in real life: After you sign up for a card that offers a free FICO score, you will be able to see how your score changes over time. Monitor it closely and use the information provided to get your credit in tip-top shape. Because, trust us, one day, you will need it.

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