You pay an annual fee to get benefits. But very often, you forget all the benefits you pay for. In fact, there is a wide variety of credit card benefits that differ extensively from one another. It's more than just purchase insurance and warranties. Some of the best benefits focus on travel.
This article provides insight on what types of benefits your credit card gives you. In no particular order, here are ten of the top benefits you get from your Canadian credit card.
1. Rewards points
The most used benefit of a credit card is the collection of points that count towards rewards. For example, the American Express
Easy flexibility on spending rewards points is key to finding the best cash back reward credit card. To compare credit cards and their various rewards in Canada, a great way of comparing credit cards in Canada Is to consider what your main purchases are and see what the cash back rewards cover.
When you are already making purchases, it only makes sense to gain as much from that spending as possible.
Read more abut the American Express Cobalt Card
2. Travel Rewards
Credit card travel rewards are benefits that range across hotel, resort, airline, and car rental agencies, to name a few. Rewards include travel insurance, DoorDash subscriptions, Air Canada access benefits, savings on fuel, priority lounge passes, and mobile insurance coverage. You pay less for airfare, get reduced prices on hotel rooms or holiday packages, and find the best offer for your travel entertainment.
By far, the most important of these is the travel insurance, and as such are broken down further. Consider the American Express
The best Canadian travel credit cards will have a number of different travel rewards to appeal to all types of cardholders.
3. Retail rewards
There are well over a hundred different retail rewards programs on different Canadian credit cards. They cover both online and in-person purchases at some of the most popular retailers in Canada. Look at the Considering the TD Aeroplan Visa Infinite Privilege Card. It's retail rewards include over 150 merchant partners and over 170 online partners, including Starbucks, Amazon, Apple, Disney, and Hello Fresh.
Aeroplan even has its own online shop offering products from select retail partners. You also earn exxtra rewards when you shop the site. You can earn retail rewards points but you can buy points too. THis is great if you are short on points or want to give them as a gift.
The TD Aeroplan Visa Infinite Privilege Card has a lot of retail rewards that are focused on active lifestyles, clothing, travel and entertainment.
Read more about the TD Aeroplan Infinite Privilege Card
4. Emergency medical insurance for people over age 65
In the event that either you or your spouse are over 65 and suffer a medical emergency while outside your home province or territory, most credit cards in Canada offer insurance coverage. For American Express
There will be different credit card insurance coverage limitations in Canada depending on which card you have.
5. Emergency medical insurance
Furthermore, what if you are under 65 and you have a medical emergency while outside your home province or territor? Well, a Canadian credit card likely has some insurance coverage benefits.
This would cover any ambulance rides or hospital stays, doctor visits and prescriptions. It can also cover repatriation to medical facilities in Canada where required. Overall, this is a smart benefit to have.
6. Credit card extended warranty coverage
Buying with a credit card in Canada can often mean that you have an extended warranty on your purchase item. The typical credit card extended warranty benefit in Canada allows for up to two years of additional warranty after the end of the manufacturer’s original warranty.
There are normally some exceptions to coverage, such as air conditioners. There will be a maximum amount of coverage offered, either annually or by the entire term of the card. The average lifetime maximum value of credit card extended warranty in Canada is $60,000 where a term offer applies.
Motorized vehicles in general are normally considered as an exception to the extended warranty offer.
7. Credit card purchase protection
Credit card purchase protection is one of the most common benefits on any credit card in Canada. This is essential coverage and ensures any purchases that are lost, stolen, or damaged, will get replaced or refunded. It makes a lot of sense to have this benefit when you buy high-value items.
The common timeframe is 90 days of coverage, with some credit cards giving longer. Sometimes purchase protection can include price protection insurance, which guarantees the best price for a period of sixty days after the purchase.
8. Travel accident credit card insurance
A benefit that can be unknown to some credit card holders in Canada is the travel accident credit card insurance. This is a type of life insurance which no one ever wants to use, which would pay a lump sum in cases of dismemberment to the cardholder, or upon their death due to a travel accident to the cardholder’s family.
There are many types of accidents that a person can have on a holiday, so this benefit is something that gives the added layer of protection to a cardholder that decreases travel-related accident financial cost to the cardholder.
9. Mobile device credit card insurance
The common rate of coverage for mobile device credit card insurance in Canada is $1,000. This can come in handy if your mobile device is damaged, stolen or simply lost.
10. Rental car theft & damage and personal effects insurance
A lot can happen when you rent a car and most people do not realize that their Canadian credit card most likely has some additional benefits which would cover a basic amount for damage or theft of a rental car that falls above or outside of the coverage offered on the vehicle’s own insurance plan. This also covers personal effects stolen or damaged while in a rental car.
Some credit cards in Canada will only offer coverage if the cardholder is in the rental car at the time of the loss (such as damage that happens in an accident) whereas others will cover this even if the cardholder is not in the rental car.
Credit card benefits in Canada: the takeaway
The above list is not exhaustive; each Canadian credit card company will have their own bespoke list of benefits which can also have more benefits that can be equally useful. What the ten listed benefits show is how much extra value you can get from a credit card in Canada. Ongoing uses, like rewards points for purchases, are an obvious win-win benefit that makes using a credit card in Canada the best option for payment. Extended warranty coverage on purchases made with the credit card is another key benefit that makes holding a credit card in Canada a smart move.
Many of the benefits of having a credit card in Canada are down to making sure the cardholder is as safe and protected as possible in every circumstance. You want certain protections in case of the unexpected.
In so many ways, using a credit card in Canada makes more sense than not using one. Be sure to consider the best credit card options in Canada before making your choice.
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About The Author: Arthur Dubois
Passionate about personal finance and financial technology, Arthur Dubois is a writer and SEO specialist at Hardbacon. Since his arrival in Canada, he’s built his credit score from nothing.
Arthur invests in the stock market but doesn’t pay any fees because he uses National Bank Direct Brokerage online broker and Wealthsimple’s robo-advisor. He pays for his subscriptions online with his KOHO prepaid card, and uses his Tangerine credit card for most of his in-store purchases. When he buys bitcoins, it’s with the BitBuy online platform. Of course it goes without saying that he uses the Hardbacon app so that he can manage all of his finances from one convenient place.
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