Get The Most Out Of Your Credit Card

January 17, 2014

Credit card and pen on the chart

Almost everyone has a credit card or two in their wallets. Though most financial experts will tell you that you will most likely end up in extreme debt because of your credit card, there are still advantages to owning one especially if you know how to be responsible with it and you are not likely to be tempted to abuse the privileges that come with a credit card. What benefits or additional perks do you get out of your credit card?

The best advantage that a credit card gives is convenience. No matter where you go you have the assurance that when you need money, you have it. In cases like emergencies and you don’t have the cash on hand, you can rely on your credit card to bail you out of a difficult situation. What’s more, credit cards are the preferred method of payment for renting a car, booking a hotel room, charging airplane tickets and even for online transactions.

Another advantage of using your credit card responsibly is that it affects your credit history and credit rating. If you pay your bills on time and you’ve had your credit card for a number of years, these performance leads back to gaining positive credit points and ups your credit rating making you eligible for better rates when buying a car or a house or when you have business dealings with other lending companies. On the other hand, if you keep opening credit card accounts and closing them regularly, this practice negatively affects your credit history and lenders may have the impression that you’re an unstable client.

Aside from these obvious advantages to responsible credit card use, your credit cards often include additional benefits and perks that you may not be aware of especially if the credit card company is not in the habit of marketing them regularly. Here are some rewards and perks from regular credit card companies that you may want to keep in mind for the future:

  • Frequent flyer miles – Most credit card companies have a partnership with their preferred airlines and constantly offer their customers the opportunity to rack up frequent flyer miles if you book your flights using your credit card. Most agreements involve one mile for every dollar spent, while some offer one mile for every two dollars spent (depending on the credit card company or the airline company). Once you signup for the frequent flyer program, you may even get a boost of as much as 50% towards earning your miles.
  • Rewards points – Another popular rewards system taken up by credit card companies and offered to their loyal customers is the accumulation of rewards points for every dollar spent (details may vary per credit card company) and applicable for use in partner stores, as cash or gift cards.
  • Insurance Protection for Travelers – You probably think that travel insurance can only come from insurance companies. What you may miss out on is that some credit card companies include a few insurance protection for travelers like:
    • trip cancellation/delay insurance – this may come in handy when you have to cancel or delay a trip and your credit card company will reimburse you for the cost of the non-refundable tickets that you purchased.
    • Lost luggage insurance – One of the most common problems that travelers encounter is losing their luggage in flight. Check your credit card membership to see if you’re covered under their lost luggage insurance, so that even if you can’t recover what was lost, you can at least have the finances to replace them.
    • Travel and emergency assistance – if you’re traveling out of the country, having a guide to assist you on your way and during emergencies is a god-send. Some credit card companies offer to help you find a doctor or hospital if needed and can even arrange from translation services should you need it.
  • Other standard rewards include guaranteed cashback for gas and groceries and discounts on retail purchases depending on the agreement with preferred retail partners.