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Tips for Using Credit Cards to Protect Yourself

June 30, 2010 | Credit Cards | No Comments

Credit cards are easy to abuse, but if used correctly, you can use them to your advantage.  I try to use my credit card for everything possible for cashback and rewards.  Over the years I’ve received thousands of dollars in cashback and free airline tickets.  I never worry about the interest rate, because I always pay off the balance.  So far this year I’ve gotten back almost $1,600 in cashback from American Express thanks to personal and business spending.

However, credit cards are not only a convenient way of paying for things, they can also protect you.  Depending on your credit card, services may include fraud and identity theft protection, purchase protection, travel assistance, rental car insurance and credit protection.  Some of these services maybe free with your credit card or cost a small fee.  Check with your credit card company to determine what type of protection you can receive, especially the free ones.

Credit Card Security
U.S. law limits your liability for unauthorized purchases on your credit card to only $50; however, many credit card companies will waive this amount.

Purchase Protection

According to The federal Fair Credit Billing Act, you are allowed to withhold payment for damaged or low quality goods or services purchased with your credit card, as long as you first try to resolve the problem with the merchant. This is subject to certain limitations; however, many credit card issuers have gone far beyond the legal requirements.

Many credit cards offer extended protection against theft or damage, or may reimburse you the difference if you find the same item for a lower price.  Again, you will have to check with your credit card company to determine if this is offered.

Travel Assistance
Many credit cards also offer many different services for travelers that may include roadside assistance, flight insurance and baggage protection. The major credit card companies may also offer emergency assistance to travelers, via a 24 hours a day, 7 days a week hotline.

Rental Car Insurance
Most credit cards companies offer rental car loss and damage insurance if the rental car is paid for with their card. Even if you have car insurance, your credit card company may cover the deductible.

Credit Protection
If you are concerned about your ability to make card payments when times get hard, most credit card companies offer optional plans that will cancel or suspend your monthly minimum credit card payment during certain protected events. Credit Protection products come with a fee, but can be helpful in case of an emergency.





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