The average indebted American household owes over $15,000 which means if you’re one of the few who is not saddled with a mortgage, student loans, or credit card debt, consider yourself lucky. For those of you who are in debt, you’ve got your work cut out for you. There are a ton of cost-cutting measures you can take to free up the funds you need to climb out of that hole, but one tool you may not have thought of is your credit cards. It may seem counterintuitive, but when used effectively, credit cards present a viable strategy for saving money and reducing expenses. Here’s how to do it.
1. Trip Cancellation Reimbursement
With select credit cards, Citi reimburses customers for certain trip-related charges, such as airfare or meals you purchased during a flight delay, or if your trip was delayed or canceled due to illness or another emergency. Consult the Citi website for a complete list of details. Discover and Chase feature this benefit with some of their cards as well.
2. Free Hotel Stays
The Starwood Preferred Guest card from AMEX] and the Citi Hilton HHonors card both earn you free hotel stays after certain requirements are met. For example, through the Starwood card, you can earn a free hotel room with as few as 3,000 points, and you can earn as many as five points per dollar spent. While there are plenty of cards that offer free hotels, these two come with hefty sign-up reward bonuses, placing them among the best. If you travel a lot, you can cut back on those room fees and put your savings toward your debts.
3. Complimentary Car Rental Insurance
Not every credit card offers free rental car insurance, but most do. Check the websites of your various credit cards or call up a representative for details before you rent your next car. If one of your cards carries this benefit, you can opt out of those extra fees.
4. Free Travel Insurance
For longer trips, especially those involving air travel, check your cards to see if travel insurance is included. You may qualify for lost baggage assistance, flight accident insurance, or trip cancellation insurance. You may not think this a worthwhile benefit, but if you’ve ever needed to cancel a flight or had your baggage lost, you quickly understand how valuable it is.
5. Protection Against Cheaper Prices on Purchases
Have you ever made a purchase only to find the item advertised elsewhere for less after the fact? If so, you’re going to want this perk. Some cards offered by Discover, Citi, and Chase reimburse you for the price difference, as long as you can prove it. Generally, they don’t accept online sales, but if you can find an advertised price in a printed circular for the exact product you bought, usually within 90 days of purchase, you may be able to get some money back.
6. Additional Warranties
Most product purchases come with manufacturer warranties for either six months, or one year. However, all American Express and Discover credit cards offer an additional warranty that usually doubles the original. Most other issuers offer extended warranties as well, but only through select cards. You may have to register your product at the issuer’s website, so be sure to research the details if you’re interested in this benefit. It can come in very handy if your laptop breaks down a little more than a year after you bought it.
7. Dispute Process
Most of us at some point have made a purchase we simply weren’t satisfied with or paid for a service that didn’t deliver. If the business that stiffed you won’t help out, the credit card company may. Details can vary, but most cards offer a dispute process through which you state your case in writing, provide appropriate documentation such as receipts and photos, and you may be able to get your money back. Keep a journal of every conversation you have throughout the process, as it can be lengthy and you may want it for reference going forward.
8. Replacement of Damaged or Stolen Items
We’ve all lost possessions at times, and some of us have had them stolen. If this befalls you a short time after purchasing an item with your credit card, the card company may have you covered. Check the rules and restrictions, and if you lose something or it’s stolen, report it immediately to the credit card company. Both Visa and MasterCard offer these protections through select cards.
9. Budgeting Help
Some credit cards can even help you manage your finances. Many Chase cardholders get free access to Blueprint, an online budgeting tool that helps you track your spending and pay down your debts. Those with a Citi card have access to Financial Tools, a program that offers assistance with tracking money and financial goals, creating budgets, and setting bill payment reminders.
10. Reversal of Late Charges and Credit Card Fees
Even if you’re in credit card debt, it’s important to pay your bills on time. However, we’re all human, and if you have a great track record and should happen to miss a payment, you may be able to have your fees forgiven. Call and see if your credit card company can reverse the late fee and then see if you can get the interest charges reversed as well. This is by no means a given, but it certainly can’t hurt to try. Just know that in both instances these are usually one-off occurrences and you’d be unlikely to get the deal more than once in a calendar year.
When taking advantage of credit card benefits like these, the key to the game is keeping yourself informed. Almost every card provides benefits, but no two are alike. Take some time and do the right amount of research to know where you’re covered and where you’re not. When you add up all the money you’ve saved, you’re going to be glad you did.
What are you doing to take advantage of credit card benefits?
Allen Thompson writes about personal finance and the importance of using tools like debt and credit cards effectively for long-term wealth.