Debtor and Creditor

Get the Most Out of Your Credit Card Perks

Credit cards are a hit. The love affair is so strong the US Treasury slowed the printing presses in the summer of 2011 because consumers simply aren't using as much cash. Plastic is a fast and easy way to make all sorts of purchases - in the store, at online or by catalog. There's no need to carry cash or a checkbook.

Most credit cards offer more than convenience, though. Odds are, the card in your wallet or purse comes with some perks. Do you know what they are and how they work? You could be losing out if you don't.

Perks Come in All Sizes

Practically every card comes with perks, but they're not all the same.

Mega, Ultimate Perks

It's been confirmed the ultimate luxury credit card isn't a myth as some of us thought. The American Express "Black" Card really does exist. Along with the amazingly high lines of credit (one customer bought a jet with a Black Card), and with the huge annual fees, comes a litany of perks such as:

  • Hotel and airline upgrades
  • Access to luxury lounges in airports
  • A 24-hour concierge service that can find and buy practically anything, anywhere for card holders

Perks for the Rest of Us

For those of us who don't have million-dollar jobs or bank accounts, there are all kinds of valuable credit card perks:

  • Cash back bonuses, usually a percentage of your purchases and charges over a six-month or one-year period
  • Frequent flyer miles and other travel-based rewards
  • Point systems, where your purchases earn you points that you can redeem for merchandise - anything from jewelry to kitchen appliances to electronics
  • Travel accident insurance, usually covering accidental death or serious bodily injuries suffered while you're traveling
  • Trip cancellation insurance, just in case you have to cancel or postpone a trip but still have to pay cancellation fees
  • Protection against unauthorized use of your card if it's lost or stolen
  • Extended warranties, usually double the manufacturer's warranty

Know the Perks You Have & Use Them

Most of these and other credit card perks are meant to entice you to use a credit card, rather than paying with cash, check or debit card. Credit card companies make money by charging you interest on your purchases and charging merchants swipe fees on each transaction.. So, the more you use a card the more money the company makes.

It only makes sense that you take advantage of the perks. Here's how to do it:

  • Call your credit card company or go online to see exactly what perks the card offers
  • Check with your credit card company about extended warranties before you buy a warranty for the product at the store
  • Compare perks on your different cards and consider your costs. Do you need two cards that offer the exact same perks, but only one charges you an annual fee?

Special To-Dos for Rewards & Cash Back Programs

When it comes to rewards, points and similar programs, take extra care. It's important to read all information sent with - or on - your monthly billing statement, especially anything marked, Changes to Your Account. Programs often change. They can:

  • Change how you earn points. For instance, it may change from 1 point for $1, to 1 for every $2 charged
  • Change the merchandise you may redeem your points for
  • Expire unused points after a certain period of time
  • Close down the points or reward program permanently, and you'll get nothing for unused points
  • Apply a cash back bonus to your balance if it's not redeemed within a certain period of time
  • Restrict or "black out" dates, times and airlines you may use points or frequent flyer miles for

Typically, credit card companies can change or cancel a program at any time, and usually without being legally required to tell you beforehand. As a practical matter, though, most companies give you advanced warning so they don't risk losing your business.

Be Wary of New Offers

As the US economy continues its recovery, some credit card companies are looking to regain the business of consumers whose credit lines were slashed or closed because of the poor economy and job losses. Before applying for a new card:

  • Look carefully at the perks being offered and make sure they're free. Look for hidden fees or ways to earn - you may have to carry a balance to take full advantage of the card's benefits
  • Job loss or credit insurance is not a free perk - you're charged a fee based on the balance you owe
  • Know how applying for a new card and the number of cards you have impacts your credit rating

Your credit card perks are valuable, but only if you take advantage of them. Look into your cards today. You may be surprised to find out that your broken coffee maker is covered by your credit card, or that you have 10,000 points to redeem.

Questions for Your Attorney

  • Can I sell my rewards or points to someone else, like on eBay or a similar site?
  • Are there any tax issues I need to worry about when it comes to credit card perks?
  • Who gets the credit card rewards and perks in a divorce when the card is in both spouses' names?
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