Yahoo Finance 8 Credit Card Tricks You Need to Know Before You Shop
Smart shoppers will spend time researching, comparison shopping and looking for deals before making a purchase. But when it comes time to check out, many consumers won't think twice about how they pay.
Not all payment options are equal, especially when it comes to credit cards. The credit card you use can make a big difference in how much you save in both the short and long term.
[See: 12 Habits to Help You Take Control of Your Credit.]
To make the most of your credit card, keep these tricks in mind before you swipe.
1. Turn down the store warranty. Many credit cards come with a variety of built-in consumer protection benefits that will not only save you money, but give you peace of mind when you make your purchase. Common credit card warranties include:
-- Extended warranty. Many credit cards will automatically extend a manufacturer's warranty by a year or more, giving you the option to skip the expense of the in-store warranty.
-- Price protection. With a price protection credit card, you don't have to worry about missing out on a sale or price drop after making a purchase. If you see a lower advertised price on your product within a certain time frame, you can request a reimbursement for the difference. Some Citi cards even locate price drops for you automatically.
[See: 10 Easy Ways to Pay Off Debt.]
-- Theft and damage protection. As gadgets get smaller and more expensive, you may find yourself increasingly worried about theft and damage. Happily, many credit cards offer $500 or more in coverage if a product is stolen or broken within a certain time frame -- typically within 60 to 120 days.
-- Return guarantee. Trying to return an item to a store can be a chore, especially if the merchant disputes your request. With return guarantee, you can save money and avoid hassle.
2. Save money with sign-up bonuses. The next time you are budgeting for a big-ticket item or preparing for the holiday shopping season, use it as an excuse to re-examine your current credit card. If it's time for a new card, you may be able to take advantage of sign-up bonuses and limited time offers. These offers are available exclusively to new cardholders and usually require you to spend a certain amount of money within a specified time period. For instance, you could be required to spend $1,000 within the first three months to earn $150. During the holidays, you may find that you easily spend enough to earn a significant bonus for cash back, travel and other rewards.
3. Don't pay interest until 2018. Many credit cards offer new cardholders a zero percent introductory rate offer on purchases. The intro period can vary from nine months to 21 months. These offers are very helpful if you want to buy a big-ticket item but need to pay it off over time, as you won't pay any interest on that purchase during the intro period. For instance, if you buy a new smartphone for $700, you can split it up into manageable monthly payments of $33.33 over 21 months without having to pay interest. This could save you more than $200 in interest payments.
[See: What to Do If You've Fallen (Way) Behind on Your Credit Card Payments.]
4. Choose the right credit card for each purchase. Different cards reward different types of purchases. When you make your shopping lists, write down which cards give you the most rewards at each merchant. Take advantage of spending categories for more cash-back savings, especially on your everyday spending. Travel cards offer rewards for free flights, free checked bags and in-flight discounts. Some cards feature better consumer protections for your big-ticket items, such as TVs or computers. Knowing which card to use for each purchase can increase your savings and earn you more rewards.
5. Let your credit card concierge do the heavy lifting. If shopping for deals on travel, concert tickets or restaurants isn't something that you have time for or enjoy, why not have someone do it for you? Some credit cards have a built-in concierge service. Rather than spend your valuable time searching the web, call the concierge number. Tell them what you need, and they'll usually provide you with a short list of options. You can use this free benefit for travel plans, restaurant reservations, concert tickets and even shopping.
6. Protect your cash. Paying with a card is typically much safer than paying with a cash or a debit card. When you pay with cash or debit, your money is unprotected. If you lose your cash, it is gone. Debit cards draw from your checking account, so you will be out any cash from unauthorized charges while you wait for a resolution. Credit cards, on the other hand, can offer zero liability for unauthorized purchases. The credit card company will work to resolve the issue, and you won't have to wait for a refund or be out any money.
7. Credit card shopping portals save you money. Many credit cards have their own shopping portals for their cardholders. As an incentive, credit card companies can offer steep discounts and increase the rewards you can earn if you shop through their website. Where a card may only give you 1 percent cash back if you shop at an online store, you may earn 5 percent cash back when you shop through your card's store.
8. Credit cards help build your credit history. Using a credit card responsibly is a reward in and of itself. The longer you use a credit card in good standing, the better that impacts your credit rating. Many credit cards offer free FICO credit reports, so that you can keep track of your credit score. Your credit history affects what kind of rate you can get for a car or home loan, and could potentially save you thousands of dollars over the course of the loan.
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