The 4 Credit Card Secrets That You Must Know About In 2023
Here Are 4 Unique Ways To Use Your Credit Cards To Your Benefit That Most People Don't Know About
I have credit cards, he has credit cards, she has credit cards, almost everyone has credit cards. While it's extremely unlikely that someone who is a credit card holder doesn't know how to use their card, there are many things that cardholders are surprisingly unaware of.
From the fact that most card's interest rates are variable or can change without notice - something many of us have been experiencing during the last year of interest rate hikes - to the fact that a card issuer can legally demand a full payment on your card balance at any given time (even if you're not behind... yes, it's in the fine print), you'd be surprised how certain aspects of card ownership could affect you.
If you want to investigate some of the basics for yourself, just read the contract and informational papers that came with one of your cards. You might find something that benefits you that you weren't aware of such as coverage of car insurance when renting a vehicle during domestic or international travel, travel insurance, and even mobile phone insurance.
It's not surprising that cardholders don't always announce these benefits. Most card companies tend to focus on cashback, points, and other major reward systems since they require spending to achieve and are more appealing to applicants. However, depending on the card, there is a lot of fine print and often not-so-fine print that goes unnoticed by the average cardholder. For example, you'd feel quite silly to find out that your credit card offers roadside assistance but you paid for a tow out of your pocket during your car's last breakdown or flat tire, right? You tried saving money by denying roadside assistance on your car insurance, without ever knowing your credit card already had you covered.
But there are more things that you can achieve or do with a credit card that are even less known among the masses, and we're going to cover each of these in a bit of detail.
Most Credit Card Rewards are Actually Tax-Free
Now, there are some definite rules and stipulations here so you'll need to do a bit of your own research as we're not financial advisors. With that being said, most credit card rewards are not taxable by the IRS. How is that possible? Well, rather than taxable income, credit card rewards generally fall into the category of being discounts rather than gifts. As long as you're making a purchase to earn them, they are - in most instances - non-taxable. This means using your credit card to rack up those points is a great way to benefit and earn free travel, amazing perks, and insane discounts on everyday purchases. Not only that, but cards that offer cash back for each dollar you spend can really add up if you use a good strategy. Just be careful not to put yourself in debt trying to earn free points, and, always check with your tax preparer, accountant, or credit card provider to be sure that the cash is all yours to keep.
Always Use Your Credit Card When Buying Online
The online retail market is ever-expanding and there is no end in sight. The possibilities for eCommerce always growing and the numbers are always rising. From a time when it was rare to order a product or service online to a time when more things are ordered by online purchases than in-store, we've come a long way.
One thing that happens at the shopping cart checkout page online is that you must make a payment. Many people have tend to use credit cards, but an equal number may choose to use debit. The problem here is that debit cards have access to the actual cash that exists in your bank account, while credit cards do not. While both types of cards have specific levels of fraud protection, credit card fraud protection is generally much more robust. Not only that, but if someone gains access to your credit card number and personal info or clones your credit card and uses it fraudulently, your cash will still be in your bank. If the same occurs with a debit card, you could find yourself in a financial mess with your bank account drained, no access to cash, and no way to pay your bills. When traveling in foreign countries or making purchases online, always use your credit card. Debit should not even be considered an option if you want to optimize your financial safety.
You Can Make Money With Your Credit Card By Adding Authorized Users
Yes, this is true, legal, and proven. Unless your card supplier specifically prohibits the practice, you can legally "rent" your credit card's status to a complete stranger for a healthy fee. It may sound confusing, but let's explain quickly how it works.
People who want to increase their credit score can benefit greatly by having a strong, aged, high-limit line of credit that appears on their credit report. Those who are seeking a temporary boost to help them acquire financing or achieve lower interest rates on a home often pay for this service, which is known as an "authorized user tradeline". Typically, you'd only provide access like this to a family member or spouse so that they can improve their credit or use your card as needed. After all, you're the primary cardholder and responsible for any debt that accrues. But with authorized user tradelines, the bank sends the card directly to you, and so the person who needs to "rent" your credit will never have access to spend. They will not even know your name or card number. The only thing they gain is a better credit score.
There is a whole industry that revolves around this. It's legal, it's an easy way to earn passive income, and it's easy to do. However, like many things, it's not for everyone. If you're interested in making money selling your credit card tradelines, here's a wonderful source of discussion from people who've already done it or are currently doing so. If you're ready to go direct to a source and sell, you can learn more today from a tradeline company like GFS Group.
Get Extended Warranties on Product Purchases
Wait, really? Yes, it's true. However, not all cards offer this specialty service. We do know that Chase Freedom Unlimited Card and American Express Gold Card do, which is good to know. So how does it work? All you need to do is nothing except use that credit card to make your initial purchase..... Seriously.
When you use a card to buy pricey items like an expensive TV, cell phone, or computer, the item always includes at least some sort of manufacturer's warranty. In addition, many stores and services specialize in offering extended warranties or warranties that include full or partial replacement, up to the full purchase price. These cost extra money, and there completely unnecessary if you make your purchase with the right credit card. Just be sure to check the terms of this with your card issuer before making your purchases so you know exactly what's covered, and what's not.
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