When it makes sense to choose a membership program
If you’ve had contact with your credit card company lately, you may have received an offer for an optional program that requires you to pay a fee. And while no one likes fees, you shouldn’t reject an offer simply because of that. Take a good look at the benefits first. Depending on your personal situation and habits, one of these programs could be a great deal of value for you.
Types of programs available.
In return for the fee, membership programs give members access to a variety of services, discounts and protections. Types of programs include:
- Protection for your credit card account. If you lose your job or become disabled, this type of protection can ensure that you won’t have to worry about paying your credit card bill.
- Identity theft protection. These programs can give you peace of mind by offering easy access to credit reports, alerts when something is added to your report, and assistance if you are a victim of fraud.
- Travel services, including discounts on hotels, airfare, and vacation packages. These programs can get you great deals without the hassle of doing all the research yourself.
- Auto-related programs that include roadside assistance as well as discounts on auto repairs and other travel expenses. These benefits are especially helpful if you drive a lot or have an older car.
- Shopping discount programs that also include price protection, extended warranties and purchase protection. If you love a bargain, a program like this could help you get even more for your money.
- Home improvement programs that offer discounts, services and referrals related to home decorating, repair, and renovation. If you’ve just bought a home or if your home needs work, you could save a lot with this type of program.
- Overdraft protection. If your checking and credit card accounts are with the same bank, you may be able to use your credit card to provide overdraft protection for your checking account. You usually pay a fee only if you use the service, and the fee is often lower than bounced check fees.
Keep in mind that programs may vary from company to company, and few credit card companies offer them all. Check with your credit card company to see what they have available.
Managing Credit Tip #2
Looking for the best customer service? Talk to friends and family to see which credit card issuers they recommend.
Choosing the program that's right for you.
As with anything that costs money, you’ll want to be sure you’re getting good value in return for your fee. The ideal program will be easy to access, reasonably priced, and will offer benefits that suit your lifestyle. Consider these questions before you sign up:
- Is there a free introductory period? Some programs let you try them out to see if the benefits are right for you.
- How much is the fee? Is it yearly or monthly? Are there any other fees besides basic membership? Be sure you understand the true cost of the program.
- What are the benefits? Will you use them often enough to offset the cost of membership?
- Do you understand the program rules? How do you access benefits? Who should be contacted if you have questions or problems?
- Once you join, assess the program periodically. Is it working for you? Are the benefits worth the cost?
When you don't have a credit card.
If you don’t currently have a credit card — or if you’re looking for a new one — access to an appealing membership program could make the difference between a good card offer and a great one. Check the company’s Web site or call to speak to a customer representative before you apply to learn more about the programs they offer.
Money well spent.
It may sound contradictory, but sometimes you really do have to spend in order to save. The trick is to be sure that your savings outweigh your costs. A membership program with the right benefits could do just that.
What's next? Which credit card is right for you?