While we’ve written often about the downside to using a credit card, there are some advantages. While Jason Hartman doesn’t recommend racking up debt beyond your ability to repay, you might be able to use it to build your own wealth.
The first great thing about using a credit card is the potential for price protection. Many credit card companies offer refunds on items if the price drops within a few months. On qualifying purchases, this means you end up paying a lot less for items that weren’t even on sale when you bought them! Credit cards also sometimes offer purchase protection, which covers items purchased with the card from damage or theft if reported within 90 days. Typically, these benefits aren’t advertised, so check into them. Similarly, many credit card companies provide extended warranties. Usually, these are manufacturer warranties and work to double the warranty offered by the product and company.
Many credit card companies also offer rental car insurance, free of charge—which saves you a lot of money, as rental agencies charge up to $30 per day. So long as you charge the car to that particular card, you’re likely good to go. Travel insurance might also be covered—medical insurance, trip interrupting, flight delay, baggage issues, or car rental theft of damage may be covered, saving you loads of cash.
Credit cards also provide security, which includes zero liability for unauthorized purchased made in person, over the telephone, or online. This means that those accidental and fraudulent charges will not be charged to you, nor will they negatively impact your credit score. They’ll be easily reversed, unlike with debit fraud, where banks must conduct investigations before refunding your money. Overall, credit cards offer fraud protection that is unbeatable.
So, while credit cards can easily get someone who struggles with financial literacy in trouble, they’re also enormously beneficial for those who know how to use them correctly. Make sure you thoroughly research your credit card and company to best utilize the services they provide to you—chances are, you’re missing out on some great benefits you didn’t even know you had! Before you sign up, make sure that you’re able to take full advantage of these great (and often free) services.
What benefits does your credit card offer? If you’ve had any experience using any of these extended benefits, we’d love to hear about them! (http://www.flickr.com/photos/fun_flying/2959307155/)
The Young Wealth Team