The best, most unused credit card perk

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Business Week | By Catey Hill, MarketWatch

Price-match credit cards can mean less legwork and more savings.

Price matching is not a new credit card perk, but it’s one that consumers often overlook — potentially forgoing $1,000 or more in holiday savings.

Some call it price matching, some call it a price guarantee, but no matter the name, many credit card issuers and network, including Discover, Citi and MasterCard, are offering consumers refunds for the difference in price should they buy an item and then find it for a lower price later on. Discover says it’ll refund the difference up to $500 if you find your item at a lower price within 90 days of making a Discover card purchase, Citi says it will refund the difference in price up to $250 per item within 30 days of the purchase, and MasterCard says it will also refund up to $250 but within 60 days.

They say they’re offering this perk because it’s popular with customers. Citi, for example, says it launched a limited version of its price-match program in 2010 but last fall expanded it to cover all of its cards, because of positive consumer feedback. Discover says that their program, which they launched in June 2012, has been “very well received” by cardmembers.

Still, experts say that a lot of consumers have cards that offer this feature and don’t even realize it. Ben Woolsey, the director of marketing and consumer research for CreditCards.com , estimates that less than 1 percent of consumers who have the price-match perk know about it. “Cardmembers just aren’t aware of it and rarely if ever make claims.” For the card companies, that makes it a relatively low-risk perk, he says. “They’re hoping this benefit just increases people’s willingness to buy things without worrying about prices being lower in the near future or at another retailer.” (Citi, MasterCard and Discover did not share numbers with MarketWatch on the percentage of their consumers who used this perk.)

Even those who do know about the perk may be stymied by the red tape involved in actually taking advantage of it.

“They all have a lot of exclusions,” explains Jelena Ewart, a senior associate at card comparison site NerdWallet.com. Indeed, many popular gift items are typically excluded from the price match programs, she says: jewelry, art, antiques, motorized vehicles, many types of travel, items sold at a business closeout sale, items sold in very limited quantities (like some door-buster deals), items sold on online auction sites, food and animals. Plus, the programs have monetary limits. The Discover program has an annual limit of $2,500 and both the MasterCard and Citi programs, $1,000.

What’s more, consumers often have to jump through hoops to get these perks. With the Discover program, not only do you have to find a lower priced item, you have to submit your Discover card statement showing the entire original purchase price, the sales receipt, and either a copy of the dated, printed, lower-price ad, or a statement, signed by the store manager on store stationery, documenting the details of the lower price of the identical item. The MasterCard program works in a similar way. With the Citi program, you have to register the items you want to price check on Citi’s site, but then the company does that price checking for you.

So is the price-match guarantee worth using?

“There’s not a big downside to the programs other than the time it takes to do them,” says Eric Adamowsky, the co-founder of Credit Card Insider. Citi’s program may be best for people who don’t have the desire to do legwork to find competitive prices, Ewart says. But for those willing to do the legwork, Discover’s program may be best, as it is potentially the most lucrative (since its annual limit is $2,500 vs. $1,000 for Citi and MasterCard) and has the longest period over which it will honor a price match (90 days).

Ewart particularly recommends the Discover It card, which offers up to 5 percent cash back in rotating categories and 1 percent on all other purchases; plus, Discover has its own shopping portal that includes most of the major department stores and gives 10 percent and sometimes more off to cardholders, and has 0 percent APR for 14 months. “It’s a really good card to use for holiday shopping,” Ewart says.

Those thinking about getting a new card that does price matching might want to “compare the value of the price match to that of a sign-up bonus for another card,” she says. “Some cards have a bonus that’s worth the price match, and you don’t have to jump through as many hoops to get the bonus,” she says. And some cards offer both a sign-up bonus and a price-match guarantee.

For example, the BarclayArrival MasterCard has a sign-up bonus worth about $400, which you can get if you spend $1,000 in the first three months of getting the card, and it has a generous rewards program that lets you earn more, she says. Finally, of course, it’s important to remember — price match or not — to get a credit card that makes sense for your lifestyle (if you carry a balance, for example, the first thing you should be looking for is a 0 percent card).

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Should you ever lend out your credit card?

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| By Dawn Papandrea, CreditCards.com

Usually it's harmless, but sometimes there may be costly consequences. Be careful with your cards.

Have you ever lent your credit card to a relative or friend to make a purchase, or bought something using someone else's card?

Perhaps you've punched in someone else's card number on his or her behalf to facilitate an online order. Maybe you've signed your spouse's name on a credit receipt. Doing any of these things is in violation of the credit card agreement, which states that only the person whose name appears on a card can use that account.

Most times, these are harmless actions, but as some experts and card users will tell you, sometimes there are consequences.

"In general, I'm no more likely to loan someone my card than I am my car. Either way, you're accepting liability for someone else's actions," says Liz Weston, a personal finance author.

Issuers ban the practice of letting another person use your card, but if you did so willingly, you are breaking your contract, not a criminal law. If someone uses your card without your permission, that's different: That's fraud. Provided you report the unauthorized use to your card issuer and the authorities, you are not held liable for fraudulent charges.

Even if the use is friendly, not fraudulent, bad things can happen. Chief among them: Charges that result from you voluntarily lending out your card are your responsibility.

To protect yourself when others use your card, don't think so much about the legalities, says Robert Lawless, professor of law at the University of Illinois at Urbana-Champaign, who specializes in bankruptcy, consumer credit and business law. "Instead, protect yourself by preventing problems before it ever gets to that point of worrying about legalities by using good judgment," he says.

For instance, using your elderly parent's card to buy groceries is breaking the card agreement, but it's likely that no one is going to question that type of transaction provided the bill is paid, says Lawless. "As a practical matter there are going to be circumstances that arise when people don't follow the contracts, and there are really no consequences to them."

However, for every innocent incident of credit card borrowing or lending, there are potential problems that can result. Here are a few to keep in mind:

A one-time privilege gets stretched. If you authorize someone to act on your behalf, you can't then go to the credit card company and say you refuse to pay for what was charged, says Lawless. In other words, you will be on the hook for any charges racked up by the person using your account. A sample Capital One credit card agreement, under the section, "Your Promise to Pay" plainly states: "If you let someone else use your Card, you are responsible for all transactions that person makes."

"I've had adult clients who gave their teens a card to go get gas, and then found out they went out to dinner, to the movies, etc.," says Terrence Shulman, founder/director of The Shulman Center for Compulsive Theft, Spending & Hoarding in Franklin, Mich. In some of the more serious offenses, people end up having to file a police report on a loved one to try to recoup some of the charges, he adds.

The person borrowing the card is careless and identity theft results. Whether they foolishly leave the account number sitting on their desk at work, or use the card to make an online purchase on an unsecured site, your account could potentially be at risk when it's out of your control. "Even if I trust the person, giving them my card makes me more vulnerable to fraud committed while the card is out of my possession," says Weston. "When there's a fraudulent charge, the issuers always ask about that, and I wouldn't want to give them any grounds to decide I have to eat the bogus charge."

Embarrassing moments. You're about to make a purchase using someone else's card, and the clerk asks for your photo ID, which of course, should not match. What to do? You'll most likely have to walk away or you can try to plead your case. Aly Walansky, a Brooklyn, N.Y.-based beauty and style blogger, recalls what her mom used to do when they were out shopping together. "When I was a kid, my mom would always use my dad's card. His name is Martin, so they always gave her a hard time. She'd be like, 'It's pronounced Mar-teen. We're French.' We're not," she says.

Getting flagged for fraud. In cases in which the merchant becomes suspicious that you're not the cardholder and you don't have permission to use the account, they can alert the creditor to possible fraud, confiscate the card or, worse, call security. In fact, card companies have a credit fraud alert hotline for just this purpose. For example, MasterCard's website instructs: "Call the Authorization Center and request a Code 10 authorization. A Code 10 authorization request alerts the card issuer to suspicious activity, without alerting the customer ... If it becomes necessary to notify the police, the operator will do so while your employee waits on the line."

As you might imagine, creditors take a hard line on this matter. "Only the person whose name is on the front of the American Express Card may use it," says Elizabeth Crosta, vice president of public affairs for American Express, "but there are other really great options."

For example, many people choose to add a child over the age of 16 or a household employee such as a nanny to their account as an authorized user, she says. It's important to remember that you're ultimately still responsible for any charges authorized card users make, but you can set spending limits on the additional card and be alerted when that limit is reached. "This is especially helpful for a parent whose child is heading off to college for the first time and wants to give the child a safe and convenient way to make purchases," says Crosta.

Another option: Consider getting the person a prepaid, reloadable card so that he or she can only spend up to the amount that's on the card.

As for situations in which something comes up spur of the moment, according to Matthew Towson, senior manager of media relations for Discover, all it takes is a quick call to add someone to your account. "An authorized user is added to the account the moment the request is made, even though it can take a few days for the card to arrive," he says. It's worth noting, however, that a merchant may still decline the purchase if they ask for identification and it doesn't match the name on the card.

Of course, as a consumer, you may have noticed that merchants don't always check IDs or signatures, which may be why people think it's OK to bend the rules. If you decide to do so, just be careful who you trust, says Shulman, since good intentions can quickly go awry. "Fraud by people you know happens a lot more than you think," he says.

Whether or not you want to take liberties with your credit card account is up to you. Just remember that as far as the creditors are concerned, the primary cardholder -- that's you -- is the one who will be expected to pay up.

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