Lost luggage? Stolen cellphone? Rental car accident? Your credit card can help. For free.
When most people hear the phrase “credit card rewards,” they think of these words: “points,” “miles,” and “cash back.” They don’t realize all the additional benefits most major credit cards offer — even from cards that aren’t really about rewards.
Here are the best benefits many cardholders don’t even know about…
1. Rental collision damage waiver
While this benefit is extremely popular with travelers, most cardholders don’t really understand how it works.
First, you must decline the optional insurance offered by the rental car agency. Next, make sure you comply with all terms and conditions of the policy you just declined. For example, certain models of cars are always excluded, such as exotic and antique cars.
In addition, many credit cards have territorial exclusions that deny coverage to cars rented in countries such as Italy, Ireland, and Israel.
Finally, understand if your credit card’s policy is primary or secondary. A secondary policy requires that you make a claim with your personal automobile insurance first, while a primary policy doesn’t. After I learned all of these facts, I’ve always used a credit card with primary coverage and declined all optional coverage.
2. Extended warranty protection
Here’s another little-known benefit that few cardholders use. Most credit cards will offer an additional year to manufacturer’s warranties for items purchased with the card. For example, the Sapphire and Sapphire Preferred cards from Chase cover up to $10,000 per claim — but exclude motor vehicles and accessories, software, and medical equipment.
3. Lost and delayed luggage coverage
It feels terrible when all the luggage has spun around the carousel, and yours is nowhere to be found. Airlines can offer some compensation, but it’s rarely enough. Thankfully, many credit cards offer separate policies for these situations. These policies cover many items the airlines don’t, such as jewelry and electronics, but the limit is much lower for those particular items.
4. Purchase protection
Covers eligible items in the event of accidental theft or damage, but usually just for 90 to 120 days after purchase. Common exclusions include antiques, collectables, medical equipment, and computer software.
5. Trip cancellation and trip interruption coverage
Reimburses you for any nonrefundable costs when you have to cancel a trip for several different reasons. This can include illness, natural disasters, jury duty, or a change in military orders. Some credit card issuers, such as Chase, will even reimburse tickets purchased with frequent-flier miles earned through one of their cards.
6. Cell phone protection
Mobile phone carriers are eager to sell customers expensive plans that reimburse in the case of theft or damage. Thankfully, there are some credit cards that offer superior protection at no cost. For example, Wells Fargo covers the price of your mobile phone up to $600 — as long as you use their card to pay the bill.
How to use these policies
First, request your credit card’s “guide to benefits.” Sure, it is has lot of legalese, but it’s still (somewhat) readable by non-lawyers. Skim it till you find any “exclusions” or “restrictions,” especially if you’re relying on these policies instead of purchasing additional coverage.
Why do the companies make these surprising credit card perks so hard to find? Perhaps because they’re free!