Five credit card perks you could be missing out on


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It's not often we get something for nothing, but credit cards can come with surprising benefits.

For most of us, they are a convenient way to pay for purchases.

But scratch the surface, and chances are you'll find your card offers unexpected perks.

credit card perks

1. Smoothing personal cash flow

In some cases, the benefits of credit cards are all about making our finances easier to manage. This may sound far-fetched given the high interest rates that can apply to outstanding debt.

But if you're self-employed, or work in Australia's $6.3 billion gig economy, it's a fair bet your income is what accountants refer to as "lumpy". In other words, you may go for weeks without income, and when it does arrive it can come as a sizeable lump sum.

Credit cards can play a role here, providing funds to pay regular bills when you're waiting for invoices to be paid. When payments do arrive, it's important to make a priority of paying down card balances. It calls for discipline, but the revolving line of credit can play an integral role in managing cash flow when income is irregular.

2. Contributing to a cause

Credit cards also make it easy to support a favourite charity - either by converting reward points to donations or, in some cases, simply by signing up for the card.

As a guide, with Community First Credit Union's Low Rate Pink credit card, half the annual fee is donated to the McGrath Foundation to help fund breast care nurses in communities across Australia.

3. Low-cost reward programs

Plenty of credit cards come with formal reward programs. The catch is that these cards typically have a higher rate, and racking up points can involve serious spending. If you have an ongoing card debt, the interest costs can easily outweigh the value of any rewards.

The thing is, you don't have to sign up for a rewards card to benefit from freebies. A number of card issuers have programs that give value back - even on low-rate cards.

Westpac Extras, for instance, gives eligible Westpac cardholders cashback payments on transactions with various brands. Citibank's Dining Program entitles eligible Citi cardholders to a free bottle of wine at participating restaurants when the bill is paid with a Citi credit card.

4. Make reservations with ease

No matter who you work for or how much you earn, a credit card is often essential to make bookings and reservations. From the local pub bistro to airlines and hotel chains, it's common to have to stump up credit card details to secure a reservation.

That doesn't mean you have to pay the final bill by card, but it gives service providers reassurance that they won't lose money by saving you a spot - and it gives consumers the confidence to make advance bookings.

Yes, credit cards can come with high interest rates, though by shopping around you can find some very affordable cards. And by using your bank balance, rather than your card limit, as your spending guide, it's possible to enjoy the best of all worlds: a handy money tool with plenty of benefits on the side.

5. Free travel cover

One of the best-known credit cards freebies is complimentary travel insurance. It's not available with every card, but it can be a valuable money saver, especially when COVID-19 plunges much of the country back into lockdown like this week.

Be sure to read the fine print to know exactly what's up for grabs. In some cases you need to pay for at least part of your trip, usually flights, with your card. If you're not sure what's on offer, speak to your card issuer.

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A former Chartered Accountant, Nicola Field has been a regular contributor to Money for 20 years, and writes on personal finance issues for some of Australia's largest financial institutions. She is the author of Investing in Your Child's Future and Baby or Bust, and has collaborated with Paul Clitheroe on a variety of projects including radio scripts, newspaper columns, and several books.