Do You Understand Your Credit Card Rewards and Perks?

You accumulate 25,000 in miles on your credit card and you get a free airline ticket, right? Well, one free airline ticket may not mean much if you don’t have enough cash to pay for other vacation-related expenses. What if you simply need more cash?

Yes, you may be able to redeem those items for cash or gift certificates!

I recently decided to redeem the miles on one of my credit cards. I went to the company’s website and lo and behold, the program had changed since I signed up a few years ago. All of a sudden, I realized that I could get not only miles, but gift certificates too. It turns out that for every 5,000 miles, I could get a $25 gift certificate. So I figured… well, I’ll cash in 25,000 miles and get $125 worth of gift certificates for use on groceries and at the hardware store. Then, in a not-so-prominent place, my eye caught a little button that said “get cash”. It turns out that, if I opted for the credit card company to send me a check, or credit my card balance, I could actually get $300! You’d think that they would offer the cash option as less of an incentive than gift certificates, but it turned out to be quite the opposite. So I opted for the cash and used the money to purchase a medium-sized freezer in order to stockpile frozen goods when they’re on sale.

What about perks? Warranties - Many large credit companies will offer to match a manufacturer’s warranty. In order words, if I purchased my freezer with cash, I would simply get the standard one-year manufacturer’s warranty. By taking the cash, putting it on a credit card that matches the warranty, and charging my freezer to the card, I got a two-year warranty. Identity theft - What type of identity theft assistance does your card offer? Some companies will refund the amount to you immediately upon reporting the issue, seeing you as innocent unless proven otherwise. Other cards will refund the amount only after a lengthy investigation. Travel Insurance - How much travel accident insurance does your card provide, if any? When you rent a car and charge it to you card, how much coverage do you really have?

If you don’t have a recent copy of your card’s terms, guidelines and programs, call your card to get a copy.