You already know that credit card rewards can help you save a bundle on your holiday spending. But many cards also offer perks such as extended warranties and free returns and security features that can save you time and stress.
Rewards are an obvious reason to use your credit cards this holiday season, so I won’t spend much time there.
While you surely know to use the right cards at checkout, it’s worth highlighting that clicking through a shopping portal will score you some bonus points when shopping online. And because we tend to spend more around the holidays, this is a compelling time to turn that money you would have spent anyway into a hefty credit card sign-up bonus.
Here are six less-heralded benefits of using credit cards while visions of sugar plums dance in your head.
See related: Holiday shopping and credit card guide 2019
1. Free shipping and returns
All American Express consumer and business cards, as well as all World and World Elite Mastercards, offer free ShopRunner memberships. This service (which normally costs $79 per year) gives free two-day shipping and free returns at more than 100 stores.
There are some big names on there, including Saks Fifth Avenue, Neiman Marcus, Ann Taylor, Bloomingdale’s and Brooks Brothers. I’ve used this myself, and it has saved me time and money.
2. Extended warranties
Most Citi cards extend a manufacturer’s warranty by two years, with total coverage not exceeding seven years. Up to $10,000 in coverage is provided. You need to buy the item with your eligible Citi card (the Citi® Double Cash Card and Citi Dividend are not included), and there are some exclusions and other legalese.
While Citi is the most generous, several other card issuers offer some fashion of extended warranty protection.
3. Purchase protection
This perk provides coverage when eligible purchases are damaged or stolen (sometimes even lost). This could be a godsend if, for example, your toddler drops your brand new phone on Christmas morning.
Most American Express cards cover up to $1,000 per occurrence and up to $50,000 per account per calendar year. Higher-end Amex cards grant up to $10,000 per incident. Coverage extends 90 days from the purchase date (as of Jan. 1, 2020).
The Chase Freedom is another popular card that comes with purchase protection (up to $500 per claim and $50,000 per year, up to 120 days from the purchase). The catch is that you need to have bought the item with that card. Therefore, you might have to involve the gift-giver in a claim, or make the claim yourself if you gave someone else something that broke or got stolen.
4. Guaranteed returns
All three major credit card networks (Amex, Mastercard and Visa) offer guaranteed return protection. The particulars vary, but in general, you can expect up to $250-300 per item (capped at $1,000 per year) if the merchant won’t take an item back within 60-90 days of purchase. Like purchase protection, you need to have bought the item with your eligible card, so you might need to pull in the gift-giver.
Credit cards are a much safer choice than debit cards and cash. If your credit card number is hacked, you won’t be held liable for any unauthorized purchases. A credit card simply represents a line of credit – it doesn’t give a thief direct access to your checking account like a debit card does.
If money is stolen from your debit card or checking account, you probably won’t have access to it for weeks. Even though debit cards have zero-liability policies, it takes time to get that horse back in the barn.
6. Spread out big purchases
Of course, you should pay your credit card bills in full each month to avoid interest. If you follow that best practice, you can get a grace period of almost two months on your credit cards.
I recently took advantage of this myself. My Citi Premier℠ bills are due on the seventh day of every month. On Nov. 12, I made a big travel purchase, and that payment won’t be due until Jan. 7. And that’s just float – you could sign up for a 0% APR card that doesn’t charge interest on new purchases for up to 18 months.
Two caveats: Be mindful of your credit utilization ratio (ideally your spending will not exceed 30 percent of your available limit), and don’t fall into the “buy now and figure out how to pay for it later” trap. This strategy works best if you have savings and are simply looking to smooth out your cash flow a bit.
Your credit cards can provide you with a lot of value even beyond cash back and travel points or miles. While some perks, such as price protection, have been cut back, there’s still plenty of value that can be gleaned from these other retail benefits.