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Tips on How to Use Your Credit Card Benefits Wisely

Understanding how to use your credit card benefits is a part of maintaining healthy finances and helping you achieve your financial goals.

By Kristen Talman | American Express Credit Intel Freelance Contributor

5 Min Read | June 26, 2020 in Cards

 

At-A-Glance

An introduction to the world of credit card rewards

An explanation of common benefits associated with credit cards, such as airline miles, fraud protection, and return and purchase protection.

Information on how to use your credit card wisely for big purchases

Read on to explore tips on finding the right benefits for you and how to maximize common benefits – including airline miles, fraud protection, and return and purchase protection. We’ll also share more on financing large purchases responsibly.

 

The World of Credit Cards

When choosing a credit card, understanding the different types and their respective rewards can equip you to make an informed decision best suited for your financial habits. Below, we explain how rewards differ across cards and how you can apply them.

 

Credit card providers often also offer special welcome bonuses to new cardholders upon opening a new account. These welcome bonuses can help customers maximize benefits, rewards and promotions for a specified amount of time.

 

Figuring Out The Right Benefits

If you find yourself trying to figure out how to use your points, first determine what card benefits best fit your lifestyle and interests. Some credit cards may allow you to redeem points for travel or merchandise while others enable you to use your points for cash back (usually in the form of a statement credit) or gift cards.

 

Word to the wise, however: miles benefits can be a bit more limited than general travel benefits, so read the fine print. An airline miles credit card is often linked to a loyalty, or frequent-flyer program, in a specific airline while travel benefits can offer more flexibility. For example, you can choose to use your travel benefits to pay for flights, get free baggage allowance, or snag a seat upgrade.

 

Now, let’s explore some ideas on how to maximize different types of benefits you may be offered. First, we’ll look at airline miles, and then we’ll share more information on fraud protection and disputes.

 

Maximize Your Airline Miles

Already dreaming of your next travel destination? Then you may be someone well-suited for an airline miles credit card that rewards you when you spend on travel.

 

Many credit card providers may reward customers with airline miles based on their credit card spending or usage. However, the specific mile-to-spend rate varies per provider and agreements they may have in place with airlines.

 

Once you achieve a certain amount of points, you may be eligible to redeem your miles for a flight or additional airline benefits. Credit card miles are often tied to a specific airline’s frequent flyer program. Through accumulating miles on your credit card, you may be able to use your reward for flight perks such as seat upgrades, additional baggage, or priority boarding.

 

Using your credit card benefits can be a perk for responsible customers and a smart way to maximize all the offerings available to you as a cardholder.

 

Return and Purchase Protection

Return protection is an added safety measure to help ensure that you can return qualifying items with the assistance of your credit card provider, even if the retailer doesn’t allow returns. In order to process return protection, credit card providers generally require the following information:

  • The credit card statement that verifies the purchase was made
  • The original receipt that was given at the time of purchase
  • Identification or documentation that the customer attempted to return the purchase

 

Similar to return protection, purchase protection offers protection for eligible items against damage and following a purchase.

 

Using purchase and return protection can help ensure that your purchases are verified and delivered as agreed upon. There are limitations to what these purchases may cover, so you should read your card’s terms and conditions to check what is and isn’t covered.

 

Now that we’ve covered how to use your credit card benefits responsibly, here are some tips on financing big purchases. There are numerous flexible payment plans to help you finance purchases – for example, taking advantage of a 0% introductory APR offer is one option.

 

Making the Most of 0% Introductory APR

Many credit card lenders may provide customers a 0% introductory APR offer. Annual percentage rate (APR) is the interest the customer pays each year represented commonly as a percentage of the loan balance. Opting for 0% APR usually means that you’ll pay 0% interest for a certain amount of time.

 

While a 0% APR promotional offer may reduce the pain of financing a large purchase up-front, there are a few factors you should keep in mind, from the length of the offer to minimum required payments to the impact on your credit score if you maintain high balances. These types of loans may be used for a limited period, meaning that the 0% interest rate could expire after a certain time period like 1 year or 18 months. When taking out a 0% APR loan, strive to keep your balance below 30% as a high balance can negatively impact your credit utilization ratio and harm your overall credit score.

 

The Takeaway

Choosing the right credit card for you and understanding how you can use the card benefits to meet your spending needs can help support your financial wellbeing.

Kristen Talman

Kristen Talman, American Express Credit Intel Freelance Contributor

 

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

The material made available for you on this website, Credit Intel, is for informational purposes only and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.