Some credit card benefits are standard. Here's what to compare instead.
Many credit card companies advertise benefits designed to attract new customers. But some of those so-called perks may not be perks at all.
Consumer advocates say many features promoted in card marketing have become standard across the industry or are already required by law.
That means consumers may be paying attention to the wrong details when comparing cards.
Some advertised perks are now standard
According to NerdWallet, features such as free credit score access, contactless payment, no over-limit fees and zero fraud liability protection are commonly available and may not provide much distinction between cards.
"The fact is that's actually universal to all credit cards. It's federal law that you are protected from fraud on your credit card," said NerdWallet's Kim Palmer. "Many of the perks that are touted are not really that valuable."
Three things consumers should compare
Instead of focusing on heavily advertised benefits, Palmer recommends paying attention to three key factors when choosing a credit card:
- Annual fee
- Interest rate
- Rewards program
The annual fee determines how much you'll pay each year just to keep the card. The interest rate becomes especially important for consumers who carry a balance from month to month.
When it comes to rewards, Palmer says cardholders should make sure the benefits align with their spending habits.
"You want to make sure that the rewards you're earning on a card, whether it's cash back or travel points, aligns with how you're living your life because you want to make sure that you're getting as much out of your credit card as possible," Palmer said.
Are premium cards worth the cost?
Many premium rewards cards now come with annual fees that can cost hundreds of dollars a year.
While those cards often include travel credits, statement credits and other benefits, consumers should consider how often they actually use those features.
If those perks go unused, experts say it may be difficult to justify the cost of carrying a premium card. The key question is whether the value you receive exceeds the annual fee you're paying.
