Credit Cards - Canadian Credit Cards

When properly used, rewards points and other perks can save cardholders hundreds of dollars. Free benefits include purchase protection, lost luggage reimbursement, extended warranty protection, and 0 percent introductory interest rates. Such perks are usually offered by American Express, MasterCard, and Visa and are paid by merchants through interchange fees. While the fees are paid by retailers, there are some downsides to credit card perks customers should know about.

The auto collision damage waiver benefit is a type of insurance that covers loss-of-use and administrative damages. The downside is that personal liability charges and theft or loss of personal belongings are not covered. Extended warranty is another perk that doubles the free-repair period of the warranty offered by the manufacturer. The problem is that many items are not covered. Among them are motorized vehicles such as aircraft, cars, and boats and their accessories. Other items that are not covered include collectible and antique items, medical equipment, computer software, and items that are bought for professional use or resale.

Lost luggage reimbursement reimburses cardholders for luggage that has been damaged or lost by a common carrier such as bus, ship, helicopter, train or airplane. The downside is that there are limitations and restrictions depending on the payment network and the credit card issuer. MasterCard and Visa usually pay the difference between the payment made by the carrier and the amount claimed, but up to a certain amount. Roadside assistance is beneficial in that if your automobile breaks down, the card issuer sends someone over to the rescue. Keep in mind that you will be charged for tire changes, gas delivery, jump-starts, towing, or other services received.

Concierge service is offered with the premium levels of MasterCard and Visa and the platinum cards from American Express. It helps cardholders make restaurant reservations, book travel, plan a party, pick out gifts, and get tickets for sporting events and concerts. The downside is that you will have to pay for all items or services received. If you are on a tight budget or a power shopper, it pays to do some research.

Then, there are travel credit cards and rewards credit cards with airmiles and other bonus points. Points can be exchanged for airline tickets, hotel stays, merchandise, and more. At the same time, the rewards and terms that go with these cards vary widely. For instance, co-branded airline and hotel credit cards carry an annual fee but offer more rewards points than other types of rewards cards. Other rewards credit cards have fewer restrictions and more flexible payouts, but cardholders earn fewer points. While airline rewards cards are the best option for frequent fliers, the problem with them is that some airlines do not offer enough seats to cardholders who want to exchange their points. Moreover, it may be difficult to redeem airline miles. There may be blackout dates and restrictions that make booking more difficult. On the good side, cardholders who use rewards credit cards that are issued by resorts and hotels do not have the same redemption problems. The reason is that hotels have lower operating costs than airlines and can offer free nights. Hotels and airlines generally offer a lot of bonuses, and certain credit cards feature up to 25,000 rewards miles with the first purchase.

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In most purchasing decisions, clients have the option to buy an item or save the money for later. This is why, marketers not only aim to beat the competition but to convince customers to part with their money. To this, marketers use different tactics – they try to make the cost of products less painful to buyers, making sure they do not overwhelm clients with choice. Marketers carefully position items in a more attractive manner and use the power of a default option (McKinsey Quarterly).

One trick marketers use is to offer “free” incentives, making it easier for customers to part with their cash. Free products make the product’s cost less painful as in the case of getting two items for the price of one. Another strategy marketers employ is to use the power of a default option. For example, only Visa cards could be used to buy official Olympic gear and tickets for the Winter 2010 Olympic Games. Other cards were not allowed because Visa was the official sponsor. A third strategy is not to overwhelm clients with many big-ticket items so that they are more likely to shop with credit cards. Customers will not buy the most expensive item due to budget considerations. However, they will not buy the cheapest one either, thinking of it as being inferior. The second to lowest one is the item to have the most takers, and such items are stocked in shops and department stores so that customers can purchase them using their credit cards. Finally, marketers display items in an attractive manner so that customers are tempted to buy them with their credit cards (Credit Cards).

It should be noted that many electronic stores and department stores feature their store-branded cards. The credit cards they offer come with bonus points, perks, and other beneficial features which help ease the burden of payment for consumers.

What other techniques make customers open their wallets and use their credit cards? Marketers differentiate between four types of customers and offer different strategies for dealing with them. These are the director, the analytical personality, the relater, and the socializer. The director, for example, is the take-charge type, associated with demanding type of people. These customers want facts and are not into small talk. To make someone like this use their credit card, it is recommended to give your reasons why certain item makes for the best purchase, lay out the facts, and avoid small talk. The analytical type, on the other hand, is interested in product descriptions, details, facts, and consumer reports. Analytical persons read the fine print too. To make them buy, it is best to make statements only if there is pertinent information to back them. What they look for is data and facts, and if an item has a detailed labeling, this is what the salesperson should direct their attention to. There is one main advantage in dealing with such people – they have done comparative research already (Business Know-How).

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