Things you should know about credit cards

Created by Labh.io

Credit cards come with a lot of promises, but it’s important to know what to look for beyond the usual perks and rates. Here are some lesser-known factors to consider that will help you choose the best credit card for your lifestyle and financial goals.

1. The True Cost of “Free” Rewards

Many rewards cards come with high interest rates, which can quickly eat away any cashback or points you earn if you carry a balance month-to-month. Even cards with “no annual fee” may have hidden costs that catch people off guard.

• Unknown Fact: Rewards are best for people who pay their balances in full each month. If you think you might carry a balance, a low-interest card might actually save you more money than a rewards card, even if it has fewer perks.

2. Not All Credit Card Points Are Created Equal

Points might sound like free money, but their value varies wildly depending on how they’re redeemed. Travel points, for instance, might offer double the value when used for flights but be worth much less as cashback.

• Tip: Before applying, check the point redemption value for different categories, such as travel, gift cards, or bill payments. Some cards double the value of points when redeemed for travel but give a poor rate for cash back, so pick a card that matches your spending and redemption goals.

3. Beware of Credit Card Signup Bonuses

A signup bonus might seem like easy money, but it’s not always worth the extra spending required to earn it. Many cards require you to spend thousands within a short time to qualify for the bonus.

• Unpopular Opinion: If you wouldn’t normally spend enough to hit the minimum spend requirement, skip the bonus. Spending more than you planned just to get the bonus can lead to credit card debt, negating the benefits.

4. Understanding “Introductory APR” Offers

Introductory 0% APR offers can seem like a great deal, but they often come with terms that many cardholders overlook. Some cards charge deferred interest, meaning if you don’t pay off the balance by the end of the promo period, they back-charge interest from the start date.

• Tip: Only take on an introductory APR if you’re sure you can pay off the balance within the promo period. Avoid deferred interest cards unless you have a specific plan to pay off the balance fully before the period ends.

5. Foreign Transaction Fees: A Hidden Expense

Some credit cards charge foreign transaction fees (usually around 3%) on every purchase made outside your home country, or even for online purchases with international companies. This fee can quickly add up for travelers or the shopping from international retailers.

• Consideration: If you travel often or shop internationally, look for cards with no foreign transaction fees. You can save a lot without even noticing it.

6. Payment Reporting and Credit Limits Matter for Your Credit Score

The way credit card companies report payments and credit limits can impact your credit score. Some cards report balances mid-cycle, meaning if you have a high balance on the reporting date, it could affect your credit utilization ratio, which might lower your score.

• Little-known Tip: Choose a card with high credit limits relative to your usual spending to keep your utilization low. Also, ask your issuer when they report to credit bureaus and make early payments if you want to show a lower balance.

7. Consider “Product Change” Options

Few people realize that many credit card companies allow you to “product change” a card without applying for a new one. This means you can switch to a different card with the same issuer without affecting your credit score.

• Uncommon Advantage: This is ideal if your needs change or you no longer want to pay an annual fee. For instance, you can downgrade a premium card to a no-fee version but keep your account open, helping maintain your credit score.

8. Read the Fine Print on “Purchase Protection” and Extended Warranties

Many credit cards offer purchase protection or extended warranties on items bought with the card. However, the terms of these protections are often restrictive, and some issuers are known to deny claims if documentation isn’t perfect.

• Tip: If you want to rely on these benefits, keep your receipts, and make sure you understand the claim process before you need it. Some cards even offer cell phone insurance if you pay your monthly bill with the card, a great perk that can save money on costly repairs.

9. Understand How Your Card Benefits Change with Missed Payments

Many credit cards include terms that penalize you if you miss payments, often by increasing your interest rate or taking away certain perks. While most people don’t plan on missing payments, unexpected circumstances can arise.

• Important Fact: Know your card’s penalty APR and the conditions under which perks, like rewards or travel insurance, could be cancelled. In some cases, a single missed payment could void points earned or access to premium benefits, so it’s important to understand these rules.

10 Overlooked Credit Card Hacks That Will Change How You Spend!

Credit cards can be a goldmine of rewards and perks, but there are a few secret strategies most people don’t know about. Here’s a guide to some surprisingly simple hacks to get way more value out of your credit card — without spending more than you already do.

1. Get Paid for Opening a Bank Account

Did you know you can fund some new bank accounts with a credit card instead of cash? This trick can help you meet a card’s spending requirement to earn bonus points or cashback without buying anything extra.

• How it Works: When you open a new bank account, some banks let you use your credit card for the opening deposit. It counts as a “purchase” on your credit card, not a cash advance.
• Why It’s Great: You can earn rewards for money you would deposit anyway. Be sure to ask the bank if they allow this to avoid surprises.

2. Avoid Paying the Annual Fee — Even After It’s Charged!

Some cards have a steep annual fee, but there’s a way to dodge it even after it hits your account. Here’s how:

• The Hack: Many card issuers will refund your annual fee if you call within 30–60 days of it posting and ask to cancel or downgrade your card.
• Why It Works: Companies don’t want to lose your business, so they may either waive the fee or let you switch to a card without fees. Just ask!

3. Ask Your Credit Card Concierge for VIP Access

Many credit cards come with a “concierge” service that can score hard-to-get reservations, tickets to sold-out shows, and even special perks at events.

• What They Do: The concierge is like a personal assistant available to cardholders, ready to help you plan trips, secure tables at top restaurants, and even buy gifts.
• How to Use It: Just call the number on the back of your card and ask for the concierge. They’re often free to use, and it’s like having a VIP planner at your fingertips!

4. Transfer Your Card Perks to Other Loyalty Programs

Some credit cards allow you to transfer points to airline or hotel loyalty programs. This means your credit card points could cover flights, hotel stays, or other travel costs, often at a higher value than regular cashback.

• How to Maximize It: Check if your card lets you transfer points to travel partners. This can turn your points into miles or hotel nights, often giving you twice the value of cash back rewards.

5. “Reconsideration” Lines for Declined Applications

Got denied for a credit card? Don’t give up! Many issuers have a “reconsideration line” where you can ask them to review your application.

• How to Do It: Call the card issuer and ask to speak to the reconsideration department. Explain why you’re a responsible customer and why you’d like the card. You might just get approved after all!

6. Credit Cards Can Cover Your Travel Hassles

Ever had a flight delay that left you stuck at the airport? Some credit cards cover food, hotel stays, and even clothes if your trip gets delayed!

• How to Claim It: Book your ticket with a card that offers travel delay insurance, and keep your receipts if something goes wrong. You can often get reimbursed for any extra costs you face during a delay.

7. Free Rental Car Insurance You Didn’t Know You Had

Many cards cover rental car insurance — so you can say “no thanks” to that expensive insurance they offer at the counter.

• The Key: Look for cards that offer primary rental car insurance. It kicks in before your own auto insurance, saving you money if anything happens. This perk can even cover international rentals, which most car insurance policies don't cover.

8. Meet Spending Requirements Without Spending Extra

If you’re trying to meet a spending goal to earn a signup bonus, consider buying prepaid debit or gift cards that you can use later for your regular purchases.

• How It Works: Buy a few prepaid or grocery store gift cards with your credit card, then use those cards as needed. You’ll hit the spending requirement without going over budget.

9. Switch Instead of Cancelling to Keep Your Credit Score

Closing a credit card can sometimes hurt your credit score, but there’s a trick: many companies will let you “switch” to a different, no-fee card instead of cancelling.

• Why It’s Smart: You keep your credit line open, which helps your score, but avoid paying the annual fee. Just call your card issuer and ask about “product change” options.

10. Pay Off Loans or Investments with Your Points

A few cards let you use your rewards points to make loan payments or even invest! This could mean covering part of a mortgage or paying down a student loan — a unique way to make your points work harder.

• How to Use It: Check with your card provider if this option exists. Applying points toward financial products can help you get ahead on debt or grow your savings.

Mastering credit cards is all about finding the right balance—enjoy the perks, build your credit, and avoid the common traps of overspending and debt. Remember, financial responsibility doesn’t stop at managing credit; it extends to making smarter investment choices for a secure future.

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This blog was informed by trusted financial platforms, including CreditCards.com, NerdWallet, and Investopedia. These sources provided valuable insights on credit card features, rewards programs, and strategies, ensuring a reliable and informative guide for readers.