Perk up: Credit card benefits too good to ignore

Philip Pledger

Look for features and benefits that can give you more value as you travel or make everyday purchases.

Your credit card may offer included benefits — if you know what to look for. Here are eight credit card perks to ask about before applying for your new plastic.

Cash rewards. This incentive rewards you for making purchases, usually in the amount of a set percentage of your purchases. You can then redeem rewards as a credit towards your credit card balance, or redeem for merchandise available through the bank’s shopping program.

The rewards you’ll earn and the different spending categories that may earn you cash rewards vary from card to card, as do interest rates and annual fees, so you’ll want to choose carefully. Whatever card you choose, pay your balance every month — otherwise, you’ll pay interest on your outstanding balance.

Welcome bonus. Are you planning to make some big purchases with your new credit card? Many cards offer a welcome bonus. You can earn bonus cash rewards or airline miles, or get a lower interest rate on purchases for a certain amount of time, usually the first few months after opening your card.

Cell phone insurance. Some credit cards offer protection for stolen or damaged cell phones when you pay your monthly cellular bill with your eligible credit card — a great add-on if you’re prone to dropping your phone. This coverage may be supplemental and will apply once primary insurance is exhausted. Typically a deductible applies, which is the amount you’ll pay before the insurance covers you.

Travel rewards. Just by making everyday purchases with a travel credit card, you can earn miles (some cards call them rewards or points) redeemable for air travel. Often times, these cards offer a bonus for redeeming your rewards on travel — you may get more value that you would if you chose other redemption options.

Other cards may have programs that have bonuses if you spend money at specific retailers and restaurants, giving you the chance to rack up even more rewards.

Hotel rewards. Free nights, room upgrades, and late checkout — these are just some perks of using a hotel co-branded credit card. Some hotel credit cards will even let you convert your rewards to airline miles.

Rental car insurance. If your card offers auto rental collision and damage coverage when you use an eligible credit card to pay for the rental, you can say “no thanks” to the upsell of pricey collision insurance at the car rental desk. There may be some restrictions and it won’t cover personal liability, but this benefit will kick in if your rental car gets in a fender bender or is stolen.

No foreign transaction fee. Credit cards are a safe option when traveling abroad, but they’re not always cheaper — unexpected foreign transaction fees can add up quickly. Before you embark on your next trip overseas, look for a credit card that does not charge foreign transaction fees, which can lower your transaction cost.

Donate to charity. There are three main ways you can give back to a worthy cause through your credit card usage. First, some cards are co-branded with charities, and they raise proceeds for that specific organization. Second, there are cards that offer rewards that you can opt to donate to selected nonprofits. Third, you can charge a charitable contribution to your card, just keep in mind there may be a 2% to 4% merchant fee on each transaction.

Beyond perks, the use of the credit cards (and your payment of bills) impacts your credit history and score.

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