How to Get the Most Out of Your Credit Card

The pitfalls of using a credit card are obvious to anyone who has uncovered hidden fees or shifting rates on their monthly statements. But, believe it or not, your plastic can also protect you.

According to personal finance guru Ramit Sethi, the credit card perks you probably don’t know about come in three major forms: vacation insurance, car rental insurance and warranty extension.

If you’re planning a trip and you get sick or can’t make it at the last minute, the airline is going to charge you bigtime to change or cancel the trip. But you probably have vacation cancellation insurance through your credit card that will cover the fees for you. Most cards do it between $1,000 and $2,000 per year of coverage.

If you do make it on vacation, your credit card allows you to say no at the car rental counter. Never opt for the collision insurance the rental agencies offer, Sethi said. Your primary car insurance already extends and, beyond that, your credit card will typically back you up to $50000 in an accident in a rental.

And if you’re in the market for any big-ticket items like a new television or stereo, always put it on the card, which will double the warranty for free. If they don’t do it automatically, call the company and ask them to kick in the warranty extension.

Not everyone has the time to read through 40 pages of fine print that actually explains these benefits, but Sethi said that usually all it takes is a phone call to your credit carrier and they will send you one page of all the perks that you can keep handy.