Credit cards can be convenient, especially when traveling, but the most obvious credit card benefits may not be the most important one.
There are tons of hidden benefits that you may not have even considered before, and they can save you both time and money in the long run.
Today, we’re going to take an in-depth look at these 10 amazing credit card benefits that you didn’t know about!
Here are 10 amazing credit card benefits:
One of the most popular credit card benefits is cashback.
Cash-back credit cards allow you to earn a percentage of your purchase returned to you in cash at set intervals.
A common misconception is that all cash-back credit cards are inherently beneficial.
Some may charge high annual fees or have complicated reward structures that favor certain purchases over others.
Make sure you know how your card works before charging everything on it and realizing later that those rewards aren’t what they seemed.
2) Airline Miles
If you’re a frequent flyer, credit card benefits can help you travel in style.
Airline-affiliated credit cards reward you with free flights based on how much money you spend on your card, while others allow you to redeem rewards points for airfare and upgrades.
For example, you might earn 10,000 airline miles simply by using your United Airlines credit card regularly.
These benefits can help get family members where they need to go without completely breaking the bank.
3) Rewards Programs
Credit cards are set up to allow cardholders to earn one or more points per dollar spent.
Numerous reward credit cards give bonus points for certain categories of spending like cafés, groceries, or gasoline.
When certain earnings thresholds are reached, points can be redeemed through the credit card company’s online prices portal.
For some people, their credit card rewards program is enough incentive to pay with plastic instead of cash.
This credit card benefit allows customers to earn great rewards without paying high-interest rates or annual fees.
Plus, when you apply online in minutes, there’s no hard pull on your credit report.
4) Safety against fraud
Ever wonder what would happen if your card is lost or stolen?
Thanks to regulations passed in 2011, you’re no longer liable for any fraudulent charges.
In some cases, you’ll even get reimbursed for losses if you report them within 60 days of discovering them.
Most banks and credit unions have a zero-liability policy in place, meaning they won’t hold you responsible for fraud—as long as it’s reported.
5) Purchase protection
The credit card you carry in your wallet or purse is a powerful tool.
The vast majority of cards offer purchase protection, which helps cover damaged or lost items within a set period of time.
Protections typically last 90 days from purchase and offer coverage up to $500 per item, with a $50 deductible per claim.
If you paid for your last computer with a credit card, it’s worth checking whether that card offers purchase protection.
Make sure to read all terms and conditions before filing any claims for an item—many credit cards require proof of damages before paying out anything.
6) Building credit score
Secured credit cards are an ideal way to build credit.
Unlike many other types of secured loans, you’ll usually have a high credit limit.
If you make your payments on time, your credit score will increase with each passing month.
Try not to let your balance get too high; experts suggest that no more than 30% of your available limit should be used at any given time to maintain a good score and avoid fees.
The best practice is to pay off your card in full every month.
It won’t help build credit if you always carry a balance and never pay it off.
Always look for ways to save money so that you can pay off larger balances on secured cards as quickly as possible and start building more valuable rewards-earning credit in due time.
7) Interest-free credit
Many credit cards offer interest-free days or months, which is a huge benefit for consumers who use their card regularly.
The most common grace period is 21 days.
This means you can carry a balance from one billing cycle to another and not pay interest on that total balance as long as you pay off your statement in full by your due date.
It’s like an interest-free loan.
8) Universal acceptance
Accepted everywhere is one of those phrases you often hear about credit cards, but most people don’t realize that it’s quite true.
If you can manage to pay off your balance every month, you should be able to use your card anywhere in the world.
As long as there’s no specific policy prohibiting your card from being used at a certain merchant or store (check their website and/or call customer service before paying with plastic if you have any concerns).
9) Expense tracker
Once you’ve received your credit card statement for a given month, sort through each charge and enter it into your expense tracker.
The more detailed you are, the easier it will be to sort out all of your expenses in a meaningful way.
If possible, also note each purchase’s date and place.
As you track where every cent is going, credit card benefits become increasingly apparent.
Simply being able to see your purchases in detail will help eliminate frivolous spending as well as improve how much cash is left over at month’s end.
If that’s not an amazing benefit then I don’t know what is!
10) Recurring payments
If you use a credit card for recurring monthly expenses like magazine subscriptions or gym memberships, you can set it up to pay for these things automatically.
Many credit cards offer free online accounts that allow you to schedule payments and track your spending.
Setting up an account allows you to build a history of on-time payments, which is crucial when applying for bigger loans and credit cards in the future.
When not to use a credit card?
If you can’t pay off your balance in full each month, don’t use a credit card.
If you don’t have enough money to cover your expenses, leave that plastic at home.
Also, if you aren’t able to pay on time every month, or at all—credit cards are not for you.
Taking advantage of credit card perks is pointless if you will end up paying interest charges because of late payments.