Credit card debt is a serious issue but if used correctly those credit card benefits can really work for us.

Think about it, assuming we pay our bills in full and on time then technically those benefits are form of payment that the credit card companies make to us. They may come in the form of travel rewards, cash back, store credit, one way or another it’s something that is offered to us for “free”.

Each card offers different benefits which may or may not matter to you, but it’s important to know what kind of benefits are offered so you don’t end up spending money on something you may already have coverage for.

Consumer Benefits

Extended warranty – Paying for extended warranty tends to be a waste of money but if you’re getting it for free, hey that’s a bonus. Typically the extended warranty gives you an extra year of protection which can be great for high-ticket items.

Price Protection – You won’t need to worry about the merchant price protection policy if your credit card includes this perk. Generally speaking if your card offers this benefit you’ll have 60 days from the date of purchase to make a claim. Not all items qualify for price protection so read your policy.

Roadside assistance – This is a great perk since you won’t need to purchase any roadside assistance on your own. If your car breaks down in Canada or the United States, you simply call your credit card’s customer service line for assistance. It’s worth finding out who actually provides the roadside assistance to ensure they have a big enough fleet to service your needs.

Rental car insurance – You really should always be declining insurance when renting a car; between your auto insurance and credit card there’s a good chance you have more than enough coverage already. The credit card insurance will cover any damages that happen to the car, but it does not cover any personal injury so make sure you have medical insurance.

Credit card advantages

Make it rain

Cash back – This probably the most popular credit card benefits, certain cards will offer you anywhere from 1-4% cash back when making purchases. Many of the cards offer increased cash back on gas and groceries up to a certain amount so know your thresholds. E.g. if you only get extra cash back on the first $5000 spent, then once you hit that spending amount, it’s probably better to start using a different card.

Loyalty points – Many retailers have recently introduced their own credit cards which give you loyalty points that can be spent in store. This is basically another form of cash back, but will restrict you to claiming those points at that specific merchant. This could be a good thing if you’re a frequent shopper and the card offers you extra points.

Related: How to find the best Canadian rewards credit card

Travel benefits

No foreign exchange fee – This is a rare perk but it should not be underestimated. Generally speaking credit cards charge an extra 2.5% on top of the spot rate whenever you make a purchase in a foreign currency. Why pay that extra fee when you don’t have to? Honestly it’s worth picking up a no forex fee card even if you use it only when you travel.

Travel medical insurance – Health care outside of Canada can cost a small fortune so having travel medical insurance is a must; fortunately this is a standard feature for just about every travel rewards credit card. You may still need to purchase additional insurance so be sure to read the fine details of your insurance benefits. Insurance can add up so it’s no surprise that travel insurance is a popular credit card benefit.

Trip cancellation / interruption insurance – Emergencies happen and having trip cancellation will help you recoup costs in the event you do need to cancel or rebook. Trip interruption insurance can be tricky at times since not all insurance companies define “interruption” the same. Again, check your policy.

Baggage insurance – This is a benefit that many people ignore but is incredibly handy if you ever need to use it. Your luggage doesn’t even need to be lost; the policy usually kicks in if your baggage is delayed for a few hours, which is much better than the airline policies.

Final word
Credit card benefits are useless if you’re carrying a balance every month. Paying your bill in full and on time every month is much more important than any benefits you could possibly get.