Be Card Savvy-25 Ways to Get More from Your Credit Card
Do you habitually use your debit card for everyday purchases? Have you come to believe that paying with a credit card is inherently bad? Whether you exclusively use your debit card to avoid overspending or are simply committed to avoiding interest charges, you may be missing out on a wealth of benefits (most of which are free!) that can add up to a big boost in your cash flow.
All you need to do to take advantage of these free perks is to use your credit card for everyday spending, like groceries, gas, bills and subscription services. Then, most importantly, pay the balance off each month. Become familiar with the many benefits of credit cards and how their powers can be used for good, i.e., saving you money!
Rewards:
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Choose a card that lets you earn rewards points for every dollar you spend and use it for your everyday expenses. Pretty soon you’ll have enough points to pay for something special, like a vacation!
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You have options. Rewards range from travel points to cash back to discounts on adventure experiences and more. Customize your rewards for your lifestyle.
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Some credit cards offer signup bonuses—compare card offers to get extra points!
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Maximize your purchasing power with double and triple rewards. Try to time your big purchases to these promotional periods. REMEMBER: Not all card issuers are created equal. Some will issue these extra points only on certain purchases. Mountain America Credit Union, however, offers double and triple points on every purchase during our promotional period!
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If you love to get free money, choose a cash back card. Again, some card issuers only offer cash back on certain purchases. Mountain America? You guessed it—we do it on every purchase.
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Big purchases = big rewards. Save up for those big-ticket items, then charge them on your credit card. You save twice by earning HUGE rewards points and then paying off your balance right away to avoid any interest.
Travel:
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Planning a vacation? Most credit cards offer free trip delay insurance which can cover costs for hotel, clothing, food and toiletries—up to $500 per person—in the event your flight or other travel is delayed overnight or for more than 12 hours during the day.
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What about when you have to cut your trip short or cancel it completely? Yep, your credit card can help there, too. Get some or all of your money refunded with trip cancellation or interruption insurance. This coverage can be helpful if you get sick, are unable to travel due to severe weather, or suffer the loss of an immediate family member.
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Make reservations with ease. Some car rental companies and hotels (even gas stations) put a hold on your account when you make a reservation with a debit card. This hold has little impact on a credit card, but with a debit card, these funds are no longer available until the hold has cleared, which could take several days.
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If you don’t carry your own auto insurance (maybe you don’t own a car), check to see if your credit card offers rental car coverage. If it does, decline the extra cost for insurance from the rental agency and make the reservation with your credit card.
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Lost, damaged or delayed baggage? No problem! If you paid with a credit card that includes lost or delayed baggage insurance, you could be reimbursed for your lost or damaged items or the cost of purchasing necessities.
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In cases of medical emergencies, your credit card could provide some coverage if it includes travel accident insurance or emergency medical evacuation and transportation insurance.
Security:
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Credit cards provide a degree of separation from your checking account. If you have fraudulent charges, just contact your card issuer to freeze your account. You won’t have to pay those charges pending an investigation. If you have fraud on your debit card, that money is immediately taken from your checking account and takes more time to recover.
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Fraudulent charges on a credit card don’t necessarily immediately affect your cash flow because credit card users have the grace period between the time of purchase and the date the payment is due. However, when you use a debit card, the money comes out of your checking account right away. This loss of funds could have a ripple effect, leading to declined scheduled payments, bounced checks and insufficient funds fees. All of this may also lower your credit score.
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When used responsibly, credit cards can give you more peace of mind and availability of funds. The grace period gives you time to move money around, if needed, or just analyze whether it’s a purchase you want or need to make. Buyer’s remorse has an upside!
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Feel more secure when using a credit card at restaurants, where the card leaves your sight to be charged. You’re relying on the server to process the final amount correctly after you add the tip and sign the slip. With a credit card, you can be sure that your funds are protected
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Federal regulations limit your liability for unauthorized card use. In general, a consumer's liability is weighted on how quickly they report the fraudulent activity to their financial institution. We highly recommend that consumers monitor their accounts frequently and report any unauthorized transactions as soon as possible.
Purchases:
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Credit cards offer purchase protection. If something you buy is damaged, lost or stolen (or otherwise made unusable) within a certain amount of time—120 days after purchase is common—you’ll be reimbursed. Most card issuers cover up to $500 per claim. Coverage may vary, and exclusions may apply, so check with your card issuer.
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Your purchases may be eligible for extended warranty protection. Many card issuers offer additional product warranties that may exceed the manufacturer’s warranty.
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Protect your purchases with service providers. If you pay for services (like a new roof) and shortly afterward something fails or is not what was promised, if you paid with cash or a debit card, that money is gone. If you used a credit card, however, you can dispute the charge with the card issuer and they can withhold payment. At that point, the burden of proof is on the service provider to show that the work was done correctly.
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You have purchasing power! You can buy large-ticket items even though the funds designated for those purchases will be coming at a later date (say, in your next paycheck).
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Just saw a lower advertised price for something you recently purchased? If you used a credit card with a price protection benefit, you could be credited the difference. Unlike with purchase protection and extended warranties, this benefit isn’t usually automatic—you’ll have to initiate a claim with your card issuer.
Be card savvy:
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Using credit cards responsibly will help to build or repair your credit score, whereas your debit card usage has no effect on your credit.
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Avoid interest charges and increasing debt by spending within your means and paying off your balance every month.
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Get the best of both worlds! Use your credit card for everyday purchases and enjoy all the benefits, as long as you don’t spend more than you have and don’t carry a balance. If you get into the habit of paying the balance off daily or weekly, you’ll not only stay out of debt but you’ll also have the satisfaction of knowing your spending is helping you earn rewards.
Just because you’re trying to avoid debt doesn’t mean you have to avoid using credit cards all together. Mountain America Credit Union's VP of Financial Education, Tony Rasmussen, shares how credit cards are another financial tool that, when used responsibly, can have a positive effect on your finances and your lifestyle.
No matter what life stage you’re in, Mountain America Credit Union has a credit card that will work for you. Are you looking to establish credit for the first time? Strengthen your credit and save for the future? Earn rewards for that special vacation? Whatever your goals are, Mountain America Credit Union can guide you forward.
*Not all benefits are offered by all credit cards. Check with your card issuer to confirm what coverage you have and if there are any fees.
