5 Credit Card Benefits You Probably Didn't Know About

You could also call this article "5 things Mike didn't know about a few days ago".  Now that I know, I will funnel all my purchases through my credit card, and pay it off immediately.  Combined with the travel points, credit cards have never made this much sense.

1.  Extended Warranties.

If you purchased that item on your credit card, the credit card company will extend the manufacturer's warranty by up to one year.  Yes, that is correct.  So if you bought a blu-ray player 18 months ago, and it breaks, call your credit card company.  They will pay you the original cost of the item.  Stop paying for extended warranties you already have!

2.  Return protection up to 90 days.

If you try and return a product to the manufacturer, and they won't let you, your credit card company will refund the purchase price, minus shipping and handling (there are limits on how much they refund; mine was $300).   All you need to do is send the purchased item to your credit card company, along with providing the receipt and the record of charge on your credit card.

3.  Travel accident insurance of $100,000.

This insurance covers death or dismemberment insurance while traveling on common conveyance (plains, trains, automobiles, etc) when the entire fare was purchased on your credit card.  This is also extended to the cardholder's spouses, and dependant children under 23 years of age (good news for those "adults" still living in the basement).  Card members can designate their own beneficiary.  


4.  Purchase protection up to $1000.

This is insurance that protects purchases for 90 days after the date of purchase, as long as it was purchased with the card.  So if a flood destroys your blu-ray player after 58 days, it is likely covered by this insurance.

5.  Rental car insurance.

"Would you like to add insurance to your rental car?" might as well be "would you like me to charge you an extra $20 for no reason?".  This one many already knew about, but it's still worth writing here.  It's a great benefit.

Please be sure to check your card's specific benefits.  What I wrote above is common, but not absolute.  Now, the next time someone is bragging about how they don't own any credit cards (me, last month), you can explain why they are wrong.  The general consensus on credit cards is that they are evil, but they make a whole lot of sense for disciplined users. If your card doesn't have these benefits, I suggest finding one that does immediately.

Saving Money While on Vacation

Vacation can quickly turn into a money trap. Justifications will run rampant while you are on vacation. Just as exercising is replaced with late nights and hangovers, smart spending is replaced with the words "I'm on vacation". Those 3 words can justify anything while on vacation. Over-eating, under-sleeping, and especially over-spending. I'll be quick to point out that being thrifty can often be misunderstood. I'm not saying you should cut back on the things you love, especially on vacation, but there may be a way to keep the cost down, while still doing the things you love.

Hotels

Before you even leave, the hotel you stay at will play a big part of your spending. DO YOUR RESEARCH. Much like airline tickets, prices can vary daily, so monitor the prices for a few weeks to ensure you're getting the best deal. Check the location of the hotel. If you are close to attractions, you may be able to walk or take a free shuttle, and save yourself the price of a rental car, as well as parking. Make sure you have a kitchen in your room (we'll get to that later). Pay attention to user reviews. These always give an accurate description of what your sojourn experience will entail. I'm a huge fan of Hotels.com for it's ease of use, critic and user content, and their points system (book 10 nights, get one free). I prefer their points system over specific hotels point systems, because I am not limited to using one hotel chain.

Drinks and Meals

This can quickly turn into a vacation's biggest expense. You can easily fall into the trap of dining out for every meal, and ordering all your drinks, but this can become expensive very quickly. This does not mean you should eat sandwiches and granola bars the entire time, but pick and choose when to spend. Breakfast and lunch are two meals that can easily be handled cheaply. If your hotel room has a kitchen, then you should buy a few essentials like bread, milk, eggs, cereal/oats, lunch meat and snacks. Anytime you need to eat quick, or it doesn't need to be a special meal, just make your meal in your room. This way you can splurge on the big dinner guilt-free. If you do check a bag, you can take bottle of your favorite drink.  Another option is to buy at a local store. Avoid the bar, which is where resorts love to make their money.  You can save yourself a boatload of bar tabs if you bring your own alcohol.

Souvenirs

Two things bother me when people go on vacation. First, I see far too many people buying souvenirs they will never look at again, and taking too many pictures they will never look at again. Well, you may look at them when you force your friends, co-workers, and family to look at every single picture. Now pictures don't really cost you money, but it still bothers me. Relax, stop worrying about pictures. You may feel the need to take pictures because that's what you have always done, but honestly, how many do you really need? The same can be said for souvenirs. A few is fine, but don't go overboard. You don't need to bring an extra suitcase just for souvenirs. Not only are they unnecessary, but they are a hassle. Anything you buy, you will have to carry with you the rest of the day. You're on vacation for the experience, not to buy more stuff.  Keep it hassle-free, and save your money for your next trip.

Break the mold

I will say it many times, but being thrifty does not mean cutting out all the things you love to do. Thrifty means being smart with your money. If you love a fancy dinner on the beach, then by all means treat yourself. But don't eat out every meal when you don't need to. Don't buy unnecessary items that will never see the light of day again. Keep your trip simple. Focus on enjoying yourself and the things you love guilt-free.

How do your Saving Habits Rank vs. a Squirrel's?

You may think this is a joke but the stats say that squirrels are much smarter than us when it comes to saving up a 6 month emergency fund.  In fact, only 24% of Americans can match a squirrel's 6 month savings habit.  This tells me that humans don't have the willpower of a squirrel.  This is likely because without their savings, squirrels will die, and we can just rack up credit cards and loans, so we lack accountability.  So in order to save like a squirrel, we'll have to play some mind games.

Automatic transfers

This still remains one of the best methods to ensure you contribute to your savings every pay period.  People by nature have trouble letting go of their money, so it can be hard to manually transfer money into a savings account.  Most banks can set up an automatic transfer that puts money in your savings every month.  The only drawback is that you are seeing the money deducted from your checking every time.  The preferred method is to have your direct deposit set up so that part of every paycheck goes to your savings.  That way, much like taxes, you never see the money.  How much more annoying would taxes be if your gross pay was deposited into your account, and then the taxes were deducted?

Accessibility of accounts

Another problem people face when trying to save is that their accounts are too visible, and available. Every time you log into your checking account online, there's your savings account, just a few clicks away from becoming a new HD TV.  These "Keep the Change" auto transfers that banks do (every transaction is rounded up to the next dollar, and that change is put in savings) sound great in theory, but run into this problem of visibility. What I suggest here is using two different banks.  One bank for your everyday checking, and one that is used only for savings.  Don't even set up an online account for the savings account.  If you can't see it, you won't be tempted.

"I don't have enough money left over"

This is the excuse you hear the most.  People just don't have any money left over to save.  I will call you out on this.   There is no way that you can't spare ANY money for savings.  The problem is that you spend according to your income.  An easy fix for this is to set up the direct deposit transfer anyway.  You'll figure it out, because you'll have to.  I did this recently.  I set up a direct deposit at a much higher amount than I can afford, because it forces me to make it work.  I'll have to find places to cut expenses, hold back on unnecessary purchases, or find more places for additional income.

Squirrels are on to something

If humans were squirrels, we'd likely trade our stash of nuts in for the latest Iphone, and starve within a few weeks.  Back in the day, this is actually how things were.  If you ran out of money, you would starve.  Now, with credit cards, support systems, bailouts and loans, that accountability has vanished.  This is why many people don't ever worry about their savings.  I propose we go back to thinking like a squirrel.