We all have that one friend who has practically sworn off credit card usage. It puts you in debt. It causes damage to your credit score. It incurs sky-high interest rates. You must have heard dozens of other disadvantages.
The reality is somewhat different. With a credit card, you do more than just swipe and pay later. It comes with way more benefits than convenience. If you’re not maximising the perks of your credit card, you’re missing out on so many things.
Here’s a short guide explaining some under-the-radar perks of credit cards:
Cashback Rewards
This is arguably the best and most straightforward reward of using a credit card. Every time you use your credit card, you earn a small amount of cash back.
Most credit cards give cash back in the form of rewards, which you can use in the form of statement credits, account deposits, and purchases. In some cases, you can convert the cash back rewards into points and use them for other types of redemptions.
That said, keep in mind that cash back isn’t literal cash in your hand. Most cash back rewards don’t show up until the credit card purchase is processed.
Nevertheless, credit card cashback can help add up small amounts over time. You can save this money or use it on your next trip to the mall.
Pro tip? Use a money comparison site when choosing a credit card provider. These are independent sites, comparing the best features of different financial product providers. With a comparison site, you can find the credit card with the best perks.
Exclusive Discounts
Who doesn’t love discounts at their favourite restaurant? A credit card can help maximise these offers.
Banks often partner with restaurants, online stores, and service providers to offer 20%, 30%, 40% off their prices. This is especially true with elite or Mastercard series, where you can get discounts even on streaming platforms.
Travel Perks
Imagine travelling first-class or sipping champagne in the VIP lounge on your way to a business trip. A credit card can turn this dream into a reality.
Some travel perks offered by credit cards include:
- Travel insurance
- Rental car insurance
- Luggage protection
- Trip cancellation and interruption insurance
- Priority boarding and free checked bags
- Airport lounge access
Make sure you make the travel purchases from the card to avail these special perks.
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Extended Warranties and Purchase Protection
We’ve all been there — bought a luxurious item and broke it too soon. Many credit cards offer extended warranties for up to one additional year beyond the original manufacturer’s warranty.
Moreover, you can get purchase protection. In simple terms, you can get your product reimbursed if it is accidentally damaged, stolen, or lost within 90 days of purchase. Purchase protection is especially useful with big-ticket items like electronics.
Opportunity to Build a Desirable Credit Score
It might sound surprising, but a credit card can help build financial security over time. When you pay your monthly credit card bills on time, it helps improve your credit score.
A good credit score means you can take out loans, mortgages, and insurance when the time comes.
