3 Credit Card Benefits You Probably Didn't Know You Had
The reasons are legion. Credit cards offer their holders rewards for shopping with them, ranging from airline miles to cash to points redeemable for cash back, account credits, merchandise and gift cards. Credit cards also let you float your debt for as much as a month at a time, before having to pay for your purchases -- rather than having these payments deducted from your account immediately. And as long as that debt is floating, and unpaid, you collect interest on the cash. Just so long as you pay in full every month (and yes, we know that's a big caveat) you get all those benefits at little cost, and build up your credit history and credit score, which can save you an enormous amount of money over a lifetime.
But there are other benefits in a credit card that many of us never bother to use -- perhaps because we never know about them. Kiplinger's magazine recently dug up a treasure trove of often-overlooked credit card perks. Here are just three of the biggest:
1. Double the Warranty, Double the Fun
When shopping online, it's common to come across products that come with a manufacturer's warranty of 90, 180 or even 365 days. Buy an iPhone 6, for example, and Apple (AAPL) will cover the product for hardware repairs for one full year. Buy a refurbished piece of Apple gear, though, and chances are it'll come with only a 90-day warranty. Meanwhile, an extended-life battery for a competing Samsung (SSNLF) Galaxy SIII can be purchased with 180 days of warranty coverage on Amazon.com (AMZN).
But did you know that when paying for these purchases with a credit card, you can often get your warranty period doubled, at no extra charge?
As Kiplinger's reveals, all four of the major credit card companies -- Visa (V), MasterCard (MA), American Express (AXP), and even Discover (DFS) -- offer cards that, among their fringe benefits, include the right to have your manufacturer's warranty period on a product doubled -- as long as you purchase the product with your credit card.
2. An End to Buyer's Remorse
Have you ever bought a piece of high-end equipment on Amazon, only to find that it went on sale a day after you bought it? Of course, you kicked yourself for not waiting the extra day -- even though you realized that you had no way to know that it was going to go on sale. Well, now there's a way to avoid that issue that doesn't require you to own a working crystal ball.
As Kiplinger's points out, certain cards offered by Citigroup (C) will refund the difference in price when you buy an item only to see its price drop later -- or even if you just find the same item offered for a better price at a different store. Discover, MasterCard, Visa and AmEx offer similar benefits. But to give credit where credit is due, Citigroup's product -- "Price Rewind" -- has some extra bells and whistles, such as the ability to have Citi look for prices and tellyou if a better deal appears.
Sure, there are catches, and hoops to be jumped through. Reviewing Visa's price protection terms, for example, we see that the price drop has to be reported within 60 days of your original purchase. It applies only to eligible items, and Visa won't fully compensate you for a price drop of more than $250. You also have to produce a printed advertisement showing the price that was better than what you paid and the original sales receipt on your purchase. And there's a heap of paperwork involved before you can claim your reward -- but for an extra $250 in savings, maybe all that work is worth it.
3. Prices Aren't the Only Things That Get Dropped
Things break. That's just a fact of life. Sometimes, things get broken right after you've just bought them. (That's especially a fact of life if you live with small kids.) But once again, it's a risk that can be mitigated in part by choosing the right credit card.
Taking Visa as our example once again (it's not the only card provider offering this service), we find that Visa Signature cardholders may unknowingly enjoy a benefit called purchase security. Here, a cardholder may ask Visa for compensation if an item bought with a Visa card is stolen or damaged within 90 days of purchase. "Eligible" events that may entitle you to a damage claim (for up to $500 per item) include "fire, vandalism, accidentally discharged water, or certain weather conditions."
That doesn't cover every way an item can be damaged (again, especially if you have kids). But again, this gift horse is free -- don't spend too much time worrying over the condition of its teeth.
Motley Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, American Express, Apple, MasterCard and Visa. The Motley Fool also owns shares of Amazon.com, Apple, Discover Financial Services, MasterCard and Visa. To read about our favorite high-yielding dividend stocks for any investor, check out our free report.