Credit card

The Perks of Plastic

Some people seem surprised to learn that I use credit cards.  After all, I once had $20,000 of credit card debt.  However, I’ve learned from my mistakes and now follow four rules for the wise use of credit cards.

Anyone who follows those rules will find that credit cards can work in their favor.  Some of the top benefits include:

Purchase protection. When I make a purchase with either of my cards, if the item is stolen or accidentally damaged within 90 days, the card companies will reimburse me for up to $1,000.

Price Protection. With one of my cards, if I find the same item for a lower price within 60 days of purchase, I will be reimbursed for the difference.

Extended warranty. Both of my cards double the manufacturer’s warranty on many purchases for up to one additional year.

Car rental insurance. Before renting a car, it’s a good idea to check the terms of the insurance policy on the vehicle you own and also the terms of your credit cards. Our agent told me that for the most part the same coverage that applies to the vehicle we own applies to a vehicle we rent. The one exception is that if we’re in an accident with a rental car, the rental car company will charge a daily rental fee for every day the car is being repaired (“loss of use”), which would not be covered.

I then checked with our two credit card companies. Both offer free “secondary” insurance, assuming you use their card to pay for the rental and decline the rental company’s coverage. Secondary insurance covers anything not covered by the insurance policy on the vehicle we own, such as the deductible. However, loss of use turns out to be a gray area.  One card company rep said technically they do cover that, but only if the rental car company provides adequate documentation, which he said it rarely does (how’s that for an honest answer?).

Neither credit card company covers pick-up trucks or full-sized vans. One does not cover full-size SUVs.  One company provides coverage for rentals lasting up to 15 days, the other for 30 days.  If traveling overseas, one of our cards will not cover rentals in three countries; the other offers no coverage in six countries.

Other benefits include discounted roadside assistance and insurance for lost or damaged luggage.  Here are a couple of other credit card perks.

Discounts. You may be accustomed to looking for coupon codes and searching for other discounts on the web.  Did you know that credit card companies offer their own discounts for various merchants?  Here are the programs offered by Visa, MasterCard, and American Express.

Faith-based rewards. In an unapologetic mention of my primary sponsor, Christian Community Credit Union (CCCU), not only do their credit cards provide points that can be redeemed for travel or merchandise, but every time you use one of their cards CCCU also makes a donation to various Christian ministries.  To date, that amount has totaled nearly $3 million dollars.

Freebies. Of course, this is the benefit most people are familiar with.  While many credit card companies are becoming stingier with their reward programs, we’ve gotten a new bike for one of our kids, a new camcorder, and more just by using points.

Bottom line?  There are financial advantages available to those who use credit cards responsibly.

What perks have you gotten from your credit cards?

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3 Responses to The Perks of Plastic

  1. Matt Bell June 28, 2011 at 10:54 AM #

    Jarod – That’s a great use of your credit card points. Enjoy those BK days. I wouldn’t trade being a dad for anything, but the whole restaurant thing changes quite a bit in the AK days!

    Financial Independence, you raise a good point about all the time you can spend researching the various perks. But the ones we use the most don’t really take any time — points (researching what we want to do with them is actually kind of fun) and rental car insurance coverage.

  2. Financial Independence June 27, 2011 at 5:42 PM #

    Hi Matt, great post, mate.

    But honest how much time did you spend on discovering everything about the cards and what are the tangible benefits, in terms of money?

    For example, they give you difference if you find the item cheaper. Sure- what is the difference -how much do you pay yourself for the search?

    If you are frugal already the difference won’t be to high. I am not advocating against credit card in any way but I think they value sometimes is a bit exaggerated.

  3. Jarod Richardson June 27, 2011 at 11:45 AM #

    Being that my wife and I are still in the BK (before kids) stage of life. We often find ourselves with the ability to use our credit card points for gift cards for date night! We sometimes get gift cards for restaurants we frequent, but we try to get some for places that we think we’d ‘never be able to afford’! We don’t usually spend money on the frills, but sometimes it is nice to do something spontaneous and out of the ordinary!

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