What Protections Does Your Credit Card Offer?

Your credit card isn’t just an extra spending tool tucked inside of your wallet. It’s an incredible safety net for when something goes wrong. Find out what protective features your credit card might bring to the table.

Covering Emergency Expenses

You might not have enough savings to pay for an emergency expense that falls into your lap. When you can’t pay out of pocket, you don’t have to wonder how you’ll recover from the situation — you can turn to one of your credit cards for help. You can use the available credit on your card to cover the urgent expense and then work to pay down the balance through your regular monthly billing cycle.

You should only do this when you have enough credit available. Maxing out your cards comes with painful side effects — and more importantly, you might lose out on the protective features that your cards offer.

If your credit balances are close to their pre-set limits, you should consider an alternative solution that won’t push your card balances right to the very edge. You could go to the website CreditFresh and apply for a personal line of credit loan as a solution. With an approved personal line of credit loan, you can request a draw within your credit limit. You can use this withdrawal to cover your emergency expense in a short amount of time. Once that’s done, you can focus on a repayment plan. Similar to your credit card, this will be done through a monthly billing cycle.

Fraudulent Transactions

You could be the victim of credit card fraud. Someone could steal your card and then go on a spending spree. A credit card skimmer could steal your information when you use what seems like a regular ATM or payment terminal. A hacker could access your credit card information online. There are plenty of ways that you could fall victim to this crime, even when you’re very careful.

What you might not realize is that your credit card comes with protection for this particular crime. If a thief makes several unauthorized charges using your card or card information, you won’t be responsible for making the repayments. Through the Fair Credit Billing Act, victims of credit card fraud are only liable for a maximum of $50 in unauthorized charges. Many credit cards offer $0 liability, meaning that you won’t have to spend a single dollar for any fraudulent purchases made with your card.

You can’t access this same protection when your debit card is stolen and used to commit financial fraud. In that case, you have to report your debit card as stolen within 2 business days to limit your liability for unauthorized purchases to $50. If you take longer, your liability for unauthorized purchases is limited to $500.

What if you think you’re the victim of credit card fraud? First, call your credit card company. They can cancel your card and send you a replacement. Second, contact the authorities and report the case of fraud. Finally, if the fraud has negatively affected your credit score, dispute the information with credit bureaus to keep your credit report (along with your score) in good standing.

Credit: Math via Pexels

Extended Warranties

Your credit card might offer extended warranties for tech and appliances that you purchase with it. So, you’ll still have coverage for certain repairs and replacements, even after the product’s original manufacturer’s warranty expires. Typically, credit cards will add an extra year of protection for customers. If the manufacturer’s warranty lasts a year, you’ll actually have two years of coverage.

You will only have coverage for problems under a manufacturer’s warranty, which are defects related to the material or the build of the item. It does not cover damage from accidents. If you drop your smartphone and the screen cracks, a screen repair won’t be covered under this extended warranty. It also won’t cover replacements in cases of theft, vandalism or loss.

Travel Insurance

You might not need to sign up for a private travel insurance plan before you go on vacation. Your credit card might already provide travel insurance for you. Check through your cardholder benefits guide to see whether this type of protection is offered to you and what you need to do to access it. You will likely have to charge the majority of your travel expenses to your credit card for the insurance plan to go into effect.

What can travel insurance do? Travel insurance can provide coverage for emergency expenses while you are traveling. These are just some examples of what it can cover:

  • Emergency medical expenses
  • Delayed flights
  • Lost baggage
  • Damaged baggage
  • Hotel burglary
  • Auto rental collision

Check your credit card benefits to see what protections it offers. It could have all of these and more!

Related: Advantages of Applying for Pre-approved Credit Cards


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