7 credit card benefits you should stress this year

As you set the stage for 2021 financial resolutions, take an inventory of your credit cards to see if they are still aligned with your goals and priorities.

With the Covid-19 pandemic changing spending habits, perhaps for the foreseeable future, an audit of the benefits and costs of your cards can reveal which ones do the job and save you money, which ones take a toll on your finances – and what features you might want to search in a new map. Here are some credit card features to look for.

1. A justifiable annual contribution

An annual fee is only worth paying on a credit card if the rewards and perks more than outweigh the cost. For Sahirenys Pierce, a California-based content creator at the Poised lifestyle blog, the benefits far exceed the $ 95 annual fee for her cash back credit card. “We got $ 500 more for our Christmas presents” last year because of the cash back she won, she said.

On the other hand, a card whose value comes in the form of airline miles or travel benefits might not be profitable if you have stopped traveling.

If the card’s incentives don’t offset the fees, ask your issuer to downgrade your account to a card with no annual fee. It’s better than closing the account because your original line of credit remains open, which may benefit your credit scores.

2. Rewards adapted to the times

The incentives on many credit cards don’t necessarily match the spending changes that accompanied the pandemic. Bonus points on travel, for example, have become less valuable than higher rewards on groceries, streaming services, and take out and restaurant delivery.

Following: Four travel credit card benefits you absolutely need in 2021

“I didn’t take out my American Airlines AAL,
Citi C,
+ 2.42%
card for a long time because earning points is really a different proposition right now, and it’s a major concern when it comes to choosing which card you’re going to use, ”said Brian Riley, Chief Credit Officer of Mercator Advisory Group advisory service. The company is an independent research and advisory services company for the payments and banking industry.

Look for the credit card incentives that best reward your spending in today’s environment. Several cards in 2020 changed their reward structures temporarily or even permanently to stay relevant and useful.

For Pierce, his credit card was already making its weight in the most important categories.

“One thing that made us feel a little better – not 100% better – but a little better is that the credit card we had (a year before this pandemic) was really focused on our needs, so our races, our gasoline, our streaming services, ”said Pierce.

3. Flexible buybacks

Flexible rewards redemption options can inflate your budget with a statement credit that reduces your balance or with cash deposited directly into your bank account. Pierce appreciates that she can just get cash back and doesn’t have to try and redeem points for something like flights or gift cards. “Having that 6% cash back was much more beneficial,” she said.

During the pandemic, some popular travel credit cards temporarily allowed points to be redeemed for statement credit for purchases at places like grocery stores, restaurants and home improvement stores. Explore your cards for exchange changes.

4. Benefits for shopping online

As social distancing emptied physical stores, online shopping became even more of a lifeline. And this can be a permanent state: The MA Mastercard,
+ 1.00%
The Economic Institute estimates that 20 to 30% of the global transition linked to COVID-19 to e-commerce will remain intact.

Also see: Watch for these trends in credit cards this year

Some credit cards offer bonus rewards specifically for online purchases. Credit card offering platforms from issuers like Chase, JPM,
American Express AXP,
+ 2.18%
and Capital One COF,
+ 0.96%
Offer cash back or additional points for your purchases from specific retailers, some of which are online only. And your card may have built-in benefits that add convenience and security to online purchases, such as return protections, which reimburse a purchase when a retailer does not, or extended warranty protection.

5. Cell phone protection

Multiple credit cards offer free protection for cellphones when you pay your monthly wireless bill with the card. This benefit can cover a stolen or damaged phone up to several hundred dollars per claim, depending on the terms of the program. Covering your card can save you the expense of paying for a device protection plan through your provider. On multiple devices month after month, the savings can really add up.

6. Trip cancellation insurance

Found on some travel cards, this benefit reimburses you up to a certain amount when an unforeseen qualifying circumstance like COVID-19 derails your travel plans. To be covered, book your vacation with the card that offers the advantage. Your situation must also be eligible under the terms of the benefit.

See: Norwegian Cruise extends cruise suspension until April 30

7. Rental car coverage

This benefit covers a rental car in the event of damage or theft when the rental is booked with the card. It usually goes into effect after your personal auto insurance policy has been paid, which means it can reimburse your deductible and other out-of-pocket expenses. Obtaining coverage from your card may allow you to decline collision coverage from the car rental company. If this coverage costs, say, $ 15 a day, that’s over $ 100 saved over a week’s vacation.

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Melissa Lambarena writes for NerdWallet. Email: [email protected] Twitter: @LissaLambarena.

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