You may sign up for a premium credit card because of the rewards, but you may not even realize that it’s packed full of hidden benefits. One of the biggest reasons to always use a credit card for every purchase (in addition to getting points, of course) is that you can always dispute a charge with the issuing bank serving as third-party arbiter — that’s great protection. But better cards come with additional benefits, and your card probably has several of the following:
- Purchase protection. When I dropped my cell phone on the sidewalk two months after I bought it, I shattered the glass screen. I used a Chase Sapphire Preferred Card to pay for the phone, and for that card Chase covers “your new purchases for 120 days against damage or theft up to $500 per claim and $50,000 per account.” I called Chase up and got connected with the insurance provider. We went back and forth on some paperwork and then I received a check for $314.99 to cover the repair.
- Rental car collision coverage. Premium cards usually come with coverage for your rental car. You still need liability coverage, but if you ding the car you’re usually not going to be on the hook. Most coverage is secondary, meaning the card company pays what your own insurance doesn’t ( more or less means your deductible, and if you don’t have insurance, the card is in effect covering everything). Some cards — like Chase Sapphire Preferred, United Explorer, and Diners Club — come with primary coverage. If you ding the rental, your own insurance may not even have to know. There are some limits. A few countries — including New Zealand and Israel — may not be included in coverage, and there are limits to how expensive of a car you can rent. But usually you can just decline the rental company’s costly collision waiver and still be fine as long as you charge the full cost of the rental to your card with the coverage.
- Trip delay and cancellation. If you run into problems while traveling, and incur costs during your delay — like a hotel room and extra meals — save your receipts because the card issuer may cover that.
- Baggage delay and lost luggage reimbursement. The same idea holds for lost or delayed bags — when you have to spend money to keep going on your trip, your card company will often reimburse you for the essential items you need to buy. People buy things all the time and fight their airline, often forgetting that there’s another deep pocket that’s already promised to take care of them. Here’s how to get your bank to pay when your flight is delayed or your luggage is lost.
- Roadside assistance. It’s not as generous as a AAA membership, but if your car breaks down or you lock yourself out, there’s someone you can call to help at a modest fixed cost: your credit card company. Here are the benefits that different cards come with when you run into car troubles.
- Price protection, warranty extension, and return protection. Buy something and see it for less somewhere else? Don’t want it, but the retailer won’t take it back? Did it stop working just after the manufacturer’s warranty ended? Who you going to call? You know the answer by now…
Are you using all the benefits your premium credit card offers? Or are you leaving value on the table?