Are your perks worth the price?
But do you need those perks? And what are they costing you in annual fees and APRs?
First of all, evaluate your lifestyle and be honest with yourself when applying for a new card, advises Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. A card that covers the tab if your flight is canceled overnight or picks up the bill for you to buy new clothes after your luggage flies to a different destination sounds great, but if you only fly once a year or less, this card doesn't really fit your needs. That goes doubly if said card comes with an annual fee.
"Some of the basic perks come with any credit card," says Cunningham. "It's incumbent upon the consumer to research their card and all the terms of their card and if they have questions, call the issuer," she adds. You might find that you don't need to pay an annual fee or have a higher interest rate than you qualify for to get the perks that really matter to you.
Keep in mind, you can get some of these perks from other sources. Your car insurance, for instance, might cover you when you rent a vehicle. You may have roadside assistance available from the dealership where you purchased your vehicle or through a third-party service like AAA. Similarly, many cards now offer concierge service promising round-the-clock help with a wide array of travel and entertainment bookings. If you book travel through an agent, he or she can help with this. Trip insurance can be purchased separately; you don't need to be saddled with a card for years just because you're taking one cruise that falls over hurricane season.
Also ask yourself, "What hoops do [I] have to jump through to activate any of these protections?" Cunningham says. "Sometimes, therein lies the rub. They sound really good, but trying to get them enforced or implemented is where the consumer has a fight on their hands." Many of the protections advertised by card companies have qualifying periods, dollar caps or require other conditions or criteria to be met before they'll pay out. Credit cards certainly have their place, but an exotic-sounding or infrequently-used perk isn't going to be the best use of your credit.