People get credit cards for a variety of reasons: a desire to build a good credit score, an interest in receiving rewards, a straightforward way to purchase items, and a simple way to make purchases overseas. Credit cards make shopping, traveling, and purchasing easier! You may not know, though, that there are five hidden benefits of using credit cards.
1. Extended Warranties
If you have purchased an expensive item with your credit card and it breaks after the original warranty has expired, you may not need to worry about replacing the item yourself. Your credit card may have an extended warranty associated with it. Visa, Mastercard, and American Express are three major credit card companies that offer extended warranties for up to an additional year past the original warranty for products purchased with their cards. You will have to meet several stipulations and may need to send a variety of information to the company, but not having to pay for the product yourself is certainly worth it.
2. Credit Score Monitoring
Many credit cards offer free credit scores, so you do not need to wonder any longer if you have a good credit score or not. My credit card company provides me with a free credit score report every two weeks, which I appreciate because I am able to keep an eye on my credit score regularly.
3. Expense Tracking
My credit card company categorizes my spending throughout the year in an end-of-the-year report, which I have found helpful in budgeting as it explains where I am most likely to spend money. I especially appreciate that it is divided not only by different categories but also by different months, so I can see that I spend more on gas in the summer when I am traveling and more in department stores in November and December when I am purchasing Christmas gifts.
4. Rental Car Insurance
If you need to rent a car, you may be able to decline the expensive coverage offered by the rental car company if you have the right credit card. Many credit cards offer rental car insurance, which can save you a good sum of money when you travel.
5. Better Foreign Exchange Rates
If you travel overseas frequently, you will likely benefit from the excellent foreign exchange rates on your credit card. In addition to the fact that it is easier to use a credit card instead of exchanging money overseas, it may also be cheaper for you to use a credit card, as the exchange rate is far better than what you would find at a bank or in the airport.
In conclusion, credit cards have a variety of obvious and hidden benefits. While you may be aware that using a credit card responsibly can increase your credit score, you will also receive a host of other benefits that are less evident like extended warranties and better foreign exchange rates when you acquire a credit card.