Here’s Why You Shouldn’t Ignore These 3 Lucrative Credit Card Perks

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Whether it's earning rewards on everyday purchases, big sign-up bonuses, improving your credit score, or a balance-transfer credit card to help pay off debt faster, credit cards can be powerful financial tools when used the right way.

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The Motley Fool analysts Michael Douglass and Nathan Hamilton highlight three lucrative credit card perks in the video below and discuss why you may not want to ignore them.

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Michael Douglass: Let's talk about three credit card perks that together could be worth more than a thousand dollars.

Nathan Hamilton: Yeah, there's some important ones to focus on. One of my favorites is a FICO score for free. Now that doesn't sound sexy, maybe to people listening but --

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Douglass: They're like, "Ah, cool."

Hamilton: ... yeah. A FICO score, your credit score is one of the most important numbers in your financial life. It determines what rates you get when you borrow, especially on a mortgage and so forth. It's a number that a bank looks at you and says, "Are you risky or not when I lend you money?" That means are you going to get cheap lending or is it going to be expensive for you?

Looking at it, many credit cards, many major national brands and even local credit unions and so forth, offer a FICO store for free. If you look at the actual cost of what it would entail for a year's worth of coverage through myFICO, which is the official website to get all of your FICO scores, your full credit score profile, it's over $350 per year.

Douglass: Yeah.

Hamilton: So that is something with a credit card if you're not paying annual fees, or you may already have a FICO score with that credit card issuer, where you'd want to look and say, "Okay, I'm already getting this. Should I spend money through myFICO to also get the same information and more?"

Douglass: Right, so yeah. That's ... Up to $350 a year saved, and for something that really frankly, you kind of want to know and that's really important when you're making some of these big decisions about your credit. Whether it's a mortgage, a car loan, and these other things.

Second is, 0% intro APR, when you're looking at a balance transfer card that offers you 15 months off, where essentially you're not paying any interest during those 15 months if you pay off your balance. If you transfer a $5,000 balance to that transfer card, and are able to pay it off, that's $620 that you're saving in interest.

Hamilton: Yeah if you compare it to a general credit card interest rate, [crosstalk 00:01:55] 18% to 20%, you're looking at $620 in interest savings over that 15-month period. Which, if you're trying to chip away at debt balances or if you have a large purchase that you don't necessarily want to pay all of it up front, and you want to make those payments over 15 months or be it 21 months with some offers on the market, it's important to look at those interest savings because that is money out of your pocket that you could be paying otherwise, which generally doesn't make sense if you're looking at it from your finances and costs that you don't need to incur.

Douglass: Sure. The third one of course is, looking at balance transfers again, looking specifically at that $0 balance transfer fee, which sometimes is offered. A lot of balance transfer cards do charge you a fee up front, but some of them will wipe it.

Hamilton: Yep, typical is going to be about 3% for a balance transfer fee, standard across the market. Some vary but if you are able again to transfer a $5,000 balance at 3%, that's $150 fee. If you're looking at a card that does have a $0 introductory balance transfer fee or anything like that, that's savings again that you could be overlooking. That's just a matter of picking the right card for you.

Douglass: Right. You add those together, $350 plus $150 is $500, plus $620 is $1,120 saved potentially, if you're just smart with your credit cards. We've got this and more, a lot more tips about thinking about your budget, thinking about your debt, thinking about your credit cards, as well as our picks for the best credit cards for 2017 at fool.com/creditcards. So check us out there, and make sure that your money's working for you.

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