Credit Cards: Other Advantages

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They prevent airport security hassles. Using a credit card to buy an airline ticket may keep you from being harassed at the airport. The Federal Aviation Authority and the airlines have decided that if you buy a ticket with a check or cash you are more likely to be involved n illegal activity than if you pay with a credit card. Check- or cash- paying customers are more likely to be asked for additional information when they check in. Given that this tidbit has been published in the press, one might wonder how effective this distinction between passengers paying with credit cards and those who do not still is, but apparently it is still in effect.

They protect you against bankrupt airlines. Charging airline tickets gives you good protection against airlines that go broke after you buy your ticket but before you fly. If you paid by cash or by check for that now-worthless ticket you would probably be out the money. If you charged it, you would probably be able to get your money back from the card company. I spoke to one lady who told me that she re covered over $800 through American Express when an airline went under.

Stop-Payment Rights . Perhaps the biggest advantage of using a credit card is your stop-payment rights. Those rights can help keep you from being stung on many sorts of purchases. A good example is when you buy things by mail or phone order. It’s very hard to understand why anyone who has a credit card would use anything else for a mail-order purchase because, when you use a credit card, unlike a check, if you don’t get what you ordered you can stop payment on the charge and get your money back.

Improved Credit Rating . Another plus of using credit cards, so long as you make all your payments on time, is that regular use will help your credit rating by showing that you meet your credit commitments in timely fashion. Of course, if you don’t meet those credit card commitments in timely fashion, your credit rating is hurt.

Fewer Bank Trips . Using a credit card can really cut down on those annoying trips to the bank to get cash. It’s also great to be able to get a cash advance when the weekend looms and you’re not in the vicinity of the bank that has your checking account.

Extended Warranty, Theft, and Damage Protection . Many cards pro vide theft, damage, and added warranty protection on purchases made with the card. These programs provide valuable benefits which many of us forget about when they might come in handy. When that home computer breaks down two weeks after the manufacturer’s warranty expires, the free warranty on the credit card purchase will probably pay for the repairs if you have the original receipt. These warranty and theft protection programs require that you closely follow their some times rather complex rules. I know of one fellow who left his new Burberry coat on a train in Belgium . The card he had charged the ticket on eventually paid for a new coat, but only after he had obtained a lost and found report (in French) from the railway police office in Brussels and an estimate of the replacement cost from Burberry’s headquarters in London, all of which took a lot of time from his home in the Midwest.

Ability to Purchase Bargains . If you come across some super bargain in, say, a couch, or a trip to Paris , you can use your card to snap it up without worrying if your check is going to bounce.

Float . Things can cost you less when you pay by credit card. Float is the use of money you already spent before you pay the charge bill. Here you gain by not having to pay for purchases right away. You can put that money to use earning interest for you until it’s needed to pay the bill.


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Wednesday, December 17, 2008 17:18