The best credit cards on the market come with some perks that you just can’t get with any other product. These can get things like cash-back rewards, travel insurance, and price protection. You can even get free perks like travel benefits, making your life much easier with better purchase return policies. To qualify, you simply need to get a good or excellent credit rating.
Rules For Using The Best Credit Cards
The best credit cards on the market can become valuable tools if used properly… Likewise, they can cause you a world of trouble if not. The following rules are designed to help you avoid a number of perils while helping you maximize all of the benefits the best credit cards can offer:
1 – Treat Your Credit Cards like Cash
If you don’t have the money to pay for your purchases upfront, it is crucial that you just keep saving until you do. If you can’t make your payments in full, you will be charged an interest that will cost far more than any rewards that you might earn.
2 – Auto-pay Your Bill
The best way to make sure you never accidently pay your bill late is to set up “auto-pay” on your credit card for a certain day of the month. You can review your spending every month, but don’t even have to think about when to pay on time. It is taken care of automatically.
3 – Interest Rates Don’t Matter
Yes, you read that correctly. If you adhere to rules #1 and #2 and pay your balance in full every month and on time, the interest rate your card offers will never matter. The only way interest rates matter is if you don’t pay your bill or if you already have a high balance, in which case I recommend immediately moving to one of the best balance transfer credit cards first.
4 – Annual Fees Are Often A Good Thing
You can extract a ton of value out of a rewards card that charges an annual fee. And those rewards are often worth far more than the fee you are required to pay. For example, if you spent $50,000 on a card that paid out 2% cash-back in one year, you would earn $1,000 in cash-back rewards. With most rewards cards, the trade-off is well worth it. With that being said, it’s important to weigh the pros and cons of paying any annual fee. While some cards offer enough value to justify it, others don’t. It’s up to you to do the research and make an informed decision.
What Features Define The Best Credit Cards?
There is no one-size-fits-all description for the ideal rewards credit card. Since we all have different goals and desires, different cards will suit some of us better than others. Still, there are some general attributes that make certain cards stand out more than others. Here are some of the defining features most of the top credit cards on the market have:
1 – A Top Tier Rewards Program
Most of the best credit cards on the market offer some kind of rewards program. While some are simply points that are tied to a hotel loyalty or frequent flyer program, others offer cash-back or flexible rewards programs. But, no matter which type is offered, the best credit cards usually come with some kind of program, aimed at rewarding credit card customers for their spending habits.
2 – A Large Sign-Up Bonus
Along with rewards programs, most of the best credit cards offer a sign-up bonus for customers who meet certain spending requirements. Typically the “bonus” is awarded in points after a customer reaches a spending threshold of $3,000 or $5,000 within 90 days. Credit card issuers hope you’ll continue to use their card long after you earn the sign-up bonus, which is why they try to rope you in with this perk. Sign up bonus is relative, but I consider a good bonus to be over 40,000 points, which would typically equate to more than $400.
3 – Robust Fraud Protection
All of the best credit cards on the market offer fraud protection that shields you from liability for unauthorized purchases made with your card. Meanwhile, some cards extend this protection to cover you when you are overcharged for a product or service, or feel you were charged unfairly in some way. When you take advantage of advanced fraud protection with Chase, for example, they will temporarily remove the questionable charge from your bill while they investigate. Once they reach a decision, the charge will either be removed from your bill completely or put back on your bill with a thorough explanation of why.
4 – Travel Insurance and Trip Cancellation Insurance
Travel insurance and trip cancellation insurance are most commonly offered as perks by the best travel rewards cards. This coverage can reimburse you if your trip is cancelled due to an illness or unforeseen event, or if bad weather keeps your airplane grounded. Filing a claim is an easy process. To recieve your claim, all you will probably need to do is call the number on the back of your card and then follow up by submitting the required paperwork and documentation online.
5 – Rental Car Insurance
Some credit cards offer rental car insurance coverage, although some is better than others. For example, certain cards offer secondary car rental insurance, which provides coverage in conjunction with your own auto insurance. Meanwhile, some of the best credit cards offer primary rental car coverage, a top tier of coverage that precludes you from filing a claim with your own policy if you get in an accident or your rental car is damaged. A third type of coverage commonly offered, called a Collision Damage Waiver (CDW), takes away the rental car company’s right to pursue you for damages, in the event of your rental car being stolen or vandalised.
The Hidden Benefits of Credit Cards
Although the best credit cards offer a slew of upfront benefits, including cash back and travel rewards, many others also offer a handful of hidden perks that aren’t really well advertised. You might have to dig a little deeper to find them, but these “extras” can be really beneficial. If used correctly, they can even help you save money, travel safer, and protect yourself from undue risk.
Here are some credit card benefits not everyone knows about, and some information on how each one works:
1 – Zero Liability
Although consumer liability for fraudulent purchases made on credit is limited to $50, the best cards take that protection a step further and offer zero liability for transactions that you didn’t make. If your card is lost or stolen, or if a random charge appears on your bill, you can’t be held liable, if you report it immediately.
2 – No Foreign Transaction Fees
Many of the best credit cards on the market charge a foreign transaction fee equal to 3% of your purchase for charges made overseas. However, some waive this fee altogether – a feature that can help you save a lot of money on overseas trips.
3 – Rental Car Coverage
If you rent cars frequently, you have probably already checked to make sure your personal auto policy provides this type of coverage. However, it’s also important to check with your credit card to see if it offers this perk. While some cards only offer a secondary Collision Damage Waiver (CDW), others offer expensive primary auto rental coverage as a 100% free perk.
4 – Free FICO Scores
Although you can pay to get your FICO score at any time, several of the top rewards cards offer a free monthly FICO score on your statement. This can save you the expense of having to pay every time you want to see your credit score, thus helping you monitor fluctuations in your score over time, and make the necessary adjustments.
5 – Emergency Travel Assistance
If you find yourself in a bind, it is possible your card issuer could help. That’s because many of the best rewards cards offer emergency travel assistance for individuals traveling at least 100 miles from home. No matter your emergency, customer service agents are standing by to help you get home in the event of an emergency, find lost luggage, or book alternate travel plans.
6 – Free Travel Insurance
Although benefits vary, several of the top rewards cards offer trip delay or trip cancellation insurance that will reimburse you if your itinerary is changed due to issues beyond your control. This type of insurance is most often used when a trip is cancelled due to the unexpected death of a family member, an accident occurs, or a natural disaster puts travel plans on the back burner.
7 – Extended Warranties
Many of the top cards offer extended warranties that kick in if something goes wrong outside of a qualifying item’s traditional one-year manufacturer’s warranty. Depending on the circumstances, this coverage will usually reimburse you or sends you a replacement.
8 – Roadside Assistance
If you have a card that offers roadside assistance and experience a breakdown, all you need to do is call the number on the back of your card. You’ll be charged a flat fee depending on what type of service you require, but at least you won’t be ripped off by your local tow truck company.
Is a passionate adviser at Marketunlimited who loves recommending/giving advice on Credit Card related problems.
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