Your Credit Card Doesn’t Deliver the Travel Protection You Think it Does

If you’ve heard that your credit card has travel protection, you may be right (depending on your card). You may even have been warned not to waste this important credit card benefit.

Unfortunately, what the experts fail to make clear is that your credit card travel protection is extremely limited and they’re causing a great deal of consumer confusion. In fact, we’ve heard travelers make these assumptions about their credit card protection:

• “It’s a waste of money to buy travel insurance when I have the same protection on my credit card.”
• “I don’t worry if I have to cancel my trip because my credit card has travel protection.”
• “I don’t buy travel insurance because my credit card has travel protection if my plane is delayed.”

Only in very limited circumstances would these travelers be correct. Credit card companies advertise their travel protection and tell consumers they have protection for trip cancellations, travel delays, lost baggage, flight accidents and emergency travel assistance. And they’re right, but only to a point.

Trip Cancellations with your Credit Card

Trip cancellations with your credit card are limited to illness, injury or death of you, a close family member, or your traveling companion. Credit cards typically limit ‘close family member’ to your spouse, parent, or child and pre-existing medical conditions are never covered. By contrast, see the typically covered reasons for cancellation with travel insurance and take a look at ‘cancel for any reason’ protection, which can provide coverage for all those one-off reasons like important job interviews or tax audits or your pet getting ill.

Travel Delays with your Credit Card

Travel delays with your credit card are limited to delays due to inclement weather, mechanical failure, and lost or stolen passports. Trip delay coverage with your credit card only applies to outbound travel and there is no coverage for cancellations by a common carrier such as an airline or train.  By contrast, see the typically covered reasons for travel delays with travel insurance.

What Credit Card ‘Trip Protection’ Does Not Have

Credit card coverage does not have travel protection for the following mishaps (and many more):

• You missed a flight connection and the cruise ship departed.
• Your home is vandalized and you want to get back home and assess the damage.
• Your wife is suddenly very ill and has to be evacuated off the island to get medical care.
• You score a very important job interview and have to cancel your trip.
• You are suddenly laid off from a job you’ve had for five years.
• Your child is experiencing severe dental pain.
• You are stuck in a foreign country because angry local workers are striking.

Of course, the coverage you get with your travel insurance plan varies from plan to plan, and it’s crucial that you read the plan to know what your covered for, but no credit card will offer coverage like this.

Where Credit Card coverage and Travel Insurance Coverage IS the same

Here’s where your credit card coverage and your travel insurance coverage is the same – and where you can start to make some choices. The following coverage with your credit card is very similar to travel insurance coverage:

• Rental car protection
• Lost or damaged baggage
• AD&D and/or Flight Accident insurance with your credit card
• Emergency travel assistance and concierge benefits

The exclusions and limitations of these coverages are very similar to that of travel insurance:

1. Damage to your rental car is limited to a maximum (usually $35,000) and includes loss-of-use charges. Neither your credit card nor your travel insurance plan will cover your personal liability in an accident with a rental car and personal items in the rental car are never covered either.
2. The per-item limit for items that are lost or stolen from your baggage are similar and vary from plan to plan, credit card to credit card. You’ll still have to show a receipt for expensive items and they will only be covered up to a certain limit (usually $300-$600).
3. The AD&D and flight accident coverage with your credit card is very similar to that of a travel insurance plan. It acts as additional coverage on top of any coverage you may already have back home. If you already have a life insurance policy with your employer, for example, this will act as additional protection.
4. The emergency travel assistance services and concierge benefits will be the same and will vary depending on the capabilities of your company.

See the full explanation of credit card travel protection vs. travel insurance for more information.