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Credit card benefits can save you a lot of money and make your travel experiences much more enjoyable. Did you know there are at least ten different kinds of credit card insurance that can protect your purchases? There are also dozens of credit card benefits that can get you free or discounted travel and access to luxury perks.
In this post, we’ll take a brief look at each type of benefit and how you activate it. Once you have a basic understanding of these credit card benefits, you’ll get more value from the cards you already have and make better choices about which ones to consider next.
- Why Credit Card Benefits Matter
- How You Get Credit Card Benefits
- What Credit Card Benefits Are Out There?
- Credit Card Insurance for the Things You Buy
- Credit Card Insurance for Travel
- Credit Card Benefits for Award Redemption
- Credit Card Benefits That Save You Money
- Credit Card Benefits that Make Travel Better
- The Bottom Line
Why Credit Card Benefits Matter
Lots of people don’t even realize they have these benefits on one of their credit cards. Our first objective is to make sure you don't pay money for something you don't need. What a shame to pay $50 for help when you lock your keys in the car when you could have gotten free roadside assistance just by calling the number on the back of your United℠ Explorer Card or Chase Sapphire Reserve®.
Have you ever been talked into buying rental car insurance? What about that little popup that makes you second guess whether you need travel insurance? Credit card insurance you already have might make these add-on purchases unnecessary—and that savings can add up quickly.
Knowing these credit card benefits is also key to evaluating whether a card is worth its annual fee. Cards that are long-term keepers are fundamental to building healthy credit and making your application strategy sustainable. If you choose wisely, each card you add to your wallet can save you more than it costs.
How You Get Credit Card Benefits
The rules for how you earn or activate credit card benefits will vary from one card to the next. Some benefits are granted just for being a cardmember; others take effect when you swipe your card for a purchase. In some cases, a benefit will be a reward for meeting a spending goal on your card.
The key takeaway here is that the same type of benefit might fall into a different group depending on which card you have. Here are a couple of examples:
- Benefits for being a cardmember — American co-brand cards offer free checked bags on domestic itineraries for the cardmember and up to eight companions. You don't need to purchase the flight with your American Airlines credit card.
- Activated when you make a purchase — United co-brand cards also offer free checked bags, but the benefit is activated when you use the card to pay for your flight.
- Benefits earned by reaching a spending goal — The Hilton Honors American Express Business Card (full review) gives a free weekend night reward if you spend $15,000 on the card in a calendar year. If you spend $60,000 in a year, you can earn a second free weekend night.
But you can't assume that the Hilton free weekend night is always awarded after reaching a spending target. The Hilton Honors American Express Aspire Card free weekend night is awarded on your account anniversary just for being a cardmember.
What Credit Card Benefits Are Out There?
We’ve divided up this post among 5 different types of benefits.
- Protection for the things you buy
- Travel Insurance
- Award Travel Benefits
- Discounts & Free Travel
- Benefits that Make Travel Better
Credit Card Insurance for the Things You Buy
Many cards offer a great lineup of protections for the physical products you buy. Each of the credit card benefits in this group is triggered when you use your card to pay for your purchase. It’s a good idea to have at least one card that offers robust coverage in this category, and remember to use it when you make a major purchase.
You can think of purchase protection as a very short term insurance policy that will reimburse you for the full purchase price if something you buy is lost, stolen, or damaged. A typical card will offer this benefit for 90 to 120 days from the date of purchase. If you buy a new iPhone and drop it in the toilet two weeks later, you may be able to use this credit card insurance benefit to get a full refund.
You’ll find this coverage on many cards. Usually, the purchases that are eligible — or excluded — don’t vary much from one card to the next. The main thing to look at with this benefit is the coverage amount; $500 is a typical maximum per incident, but some cards will cover up to $10,000.
Related: Best Cards for Purchase Protection
You may already be familiar with the concept of an extended warranty. At the time of purchase, you can choose to pay a small amount upfront and then be covered if your purchase breaks or is lost. What you might not know is that many credit cards offer extended warranties on purchases made with the card. The length of the extended warranty as well as the maximum amount covered varies by card, so make sure to check your card's fine print for details.
Related: Best Cards for Extended Warranty
This coverage allows you to return an item purchased with your eligible card for a full refund if the retailer refuses to accept the item under its return policy. While you can often work it out with the merchant directly, this credit card benefit can provide an extra layer of protection. Return protection is often limited to smaller purchases—a typical policy would provide $300 to $500 per item and usually has an annual benefit cap of around $1,000. There are also a fair number of items that won't qualify, so you'll want to make sure you fully understand your card’s policy before you rely on this benefit.
Price Protection can save you from the frustration of buying something right before it goes on sale. If an item you purchased is offered at a lower price up to 60 or 90 days later, you can claim a reimbursement for the price difference. So if you bought a new tablet for $199.99, only to find that a week later it's on sale for $149.99, you can get refunded the $50 difference.
Price protection used to be a fairly common type of credit card insurance, but many cards have eliminated this offering in recent years. The key factors to watch are the window of time you have to file a claim, the documentation needed to show the lower-priced offer, and the types of purchases excluded from the policy.
Related: Best Cards for Price Protection
Cell Phone Insurance
Many credit cards offer insurance if you lose or damage your cell phone. Generally you need to be paying for your monthly bill with the card in question for its cell phone insurance to be active. Just having the Chase Ink Preferred does not activate its cell phone insurance if you are paying your phone bill with another card.
It's worth noting that this coverage could partially overlap with other types of protection. The key difference is what sort of incidents are covered. If your iPhone stops working because of a defect, you could claim extended warranty coverage on the card you used to purchase the phone. If a thief snatches out of your hand, you'd want to file a claim on the card that you use to pay your wireless bill.
Related: Best Cards for Cell Phone Insurance
Credit Card Insurance for Travel
Like purchase protection benefits, many travel insurance protections are activated by using your card to pay for all or part of your trip. The exception in this group is roadside assistance, which is normally a benefit you get just for having a card.
Flight Delay Insurance
Many cards offer flight delay insurance, which can cover expenses like meals or lodging in the case that your flight is delayed and/or you miss your connecting flight. Most cards offer $500 of coverage, but there are a few with a $300 maximum per incident.
With this benefit, the factor that separates the top-tier cards from the rest is how long you need to be delayed before your coverage kicks in. A good policy will cover you after six hours rather than twelve. You'll be asked to provide receipts for the expenses, so this benefit won't give you more compensation than your actual costs. If you know your cap, you can splurge on a five-star hotel next time you're stranded overnight.
Trip Interruption / Cancellation Insurance
Trip cancellation insurance can reimburse you for non-refundable travel costs if you need to cancel a trip before departure. For example, you booked an expensive hotel on the Gulf of Mexico, but a hurricane makes travel impossible. Trip interruption is generally similar in terms of coverage, but it kicks in when you have to cut a trip short after you have begun your travels. You'll want to take a look at who is covered (e.g. the primary cardholder and immediate family) as well as how much is covered. Generally, in order to get a full refund of your travel expenses, your entire trip must be paid for on the card or with points earned with that card.
Cards that offer roadside assistance allow you to get help for things like a flat tire, dead battery, or keys locked in your car. This benefit comes with simply having the card. Usually, there's a specific telephone number that you can call to get your assistance when you need it. You'll want to read the fine print on your roadside assistance benefit to find out what's covered and how often. If you take a few minutes to figure out which cards offer this perk, you can save yourself time and stress when you need to use this benefit.
Rental Car Insurance (CDW)
The rental car insurance that is offered by most car rental companies is usually fairly expensive compared to other kinds of insurance. If your primary car insurance does not cover you while renting a car, your credit card may.
You'll want to check and make sure whether the car insurance that comes with your credit card is primary or secondary. Primary coverage means you won't have to file a claim with the company that insures your own vehicle before coverage on a rental car will cover a loss or damage. Some credit card insurance excludes certain countries, so be sure that you'll be renting in a country where the insurance is valid.
CDW stands for Collision Damage Waiver. Generally, credit card insurance covers damage to your rental vehicle, but it doesn't cover liability if you are at fault for an accident that damages other vehicles/property or results in injuries. You should check that your personal insurance policy covers these situations with a rental car or consider purchasing supplemental liability insurance.
Baggage Delay Coverage
Baggage Delay coverage reimburses you for out-of-pocket expenses incurred if your checked bag is delayed or misdirected by a common carrier on route to your destination. While you're waiting to be reunited with your bag, you may need to purchase clothes, toiletries, or other items. Coverage under this benefit is usually around $100 per day with a maximum of $300-$500 per traveler. Like the flight-delay benefit, you'll only be reimbursed for purchases you actually make.
The key factors to watch for with this coverage are who is covered, how long your bag needs to be delayed before the coverage starts, and the maximum reimbursement. A top-notch policy starts after six hours, covers the cardholder and immediate family members, and will reimburse you $100 per day for up to five days. Some cards won't cover specific items that seem logical to replace (e.g. contact lenses), so be sure to review the rules and exclusions to avoid any surprises.
While baggage delay insurance covers bags that arrive late, some credit cards also insure your bags and their contents. This protection is activated by using your card to pay for travel with a common carrier (a company that transports passengers for money). If your bags are lost, damaged, or stolen, you can file a claim and get money to replace your lost property. These policies usually require you to file a claim with the travel provider first and will make up for any amount you don't recover from the company that mistreated your bags.
Airlines in particular aren't known for having a very generous window for filing a claim. A stolen or lost bag is obvious, but if you discover that items inside your bag are missing or damaged when you get home, take action to report the loss to the airline as soon as possible. Even if the airline denies your claim, you'll now have the paperwork required to take advantage of the protections offered by your credit card.
An excellent policy might cover your bag and contents up to around $3,000, but many offer substantially less. There is often a list of (common sense) excluded items that won't be covered. For example, jewelry, cash, and expensive electronics that shouldn't be left in a checked bag are common exclusions.
Credit Card Benefits for Award Redemption
A few credit cards give benefits that help with either cheaper or more available award redemptions.
Discounted Award Travel
This benefit helps you spend fewer points when you redeem for travel. One example of this is American Reduced Mileage Awards. Cardholders of certain American Airlines co-branded credit cards can save up to 7,500 miles on domestic, round-trip award tickets. Some hotel credit cards can give your fourth or fifth night free when redeeming points for a hotel stay.
More Award Booking Options
Sometimes a card will give you the ability to book flights that aren’t available everyone else using miles. For example, Delta cardholders can redeem SkyMiles at 1 cent each towards paid travel. United cardholders (and elite members) get access to additional award space that is not available to the general public. These credit card benefits can make the difference between being able to use miles for your next trip and missing out.
Credit Card Benefits That Save You Money
Travel Statement Credits
This benefit gives you an automatic refund (in the form of a credit on your statement) when you use your card to make a qualifying purchase. Normally, you get a predetermined value that resets each month or each year.
Each card has its own rules about what type of purchases qualify. The Sapphire Reserve $300 travel credit and the Citi Prestige® Card $250 travel credit can be applied to a broad group of travel purchases.
In contrast, the American Express Airline Fee Credit is limited to ancillary fees with an airline you select each year. Checked bag, seat selection, and award change fees would trigger the credit, but airfare or award taxes typically would not be eligible.
Some credits apply to specific fees. Here are a few examples:
- British Airways Visa Signature® Card — Get a statement credit to cover award taxes and fees.
- Hilton Honors American Express Aspire Card — Get a statement credit for resort fees.
- Southwest Airlines credit cards — Get statement credits when you pay for in-flight Wi-Fi and Early Bird check-in.
Hotel Free Nights
Free night certificates are normally awarded each cardholder year, but there are a few that are earned after meeting a spending threshold. Most free night certificates have some restrictions on using them. Some are only good on certain days of the week (e.g. Hilton weekend night certificates), while others are only good at properties under a particular award price (e.g. Marriott properties up to 35,000 Marriott points).
An annual free night is one of the credit card benefits that can make it especially easy to see how a card pays for its annual fee. If you choose the right hotel, you'll often save $200 or more compared to a paid stay, and many of the cards that feature this benefit have fees under $100. When you're considering a new hotel card, check to see if you'll get a free night certificate right away. This shouldn't be a dealbreaker, but sometimes you won't have to wait until your first account anniversary to take advantage of the free night benefit.
Some cards give a benefit where a companion can travel with you for a free or reduced cost. Alaska, Delta and British Airways each have one or more co-branded cards that offer a companion certificate. Most cards offer one companion ticket each year, so you need to use stay on top of when the benefit expires. Fortunately, AwardWallet has you covered with expiration reminders for many companion certificates.
Southwest Airlines also has a Companion Pass that allows a companion to fly for free on as many flights as you like while the benefit is active. The Southwest Companion Pass is not a credit card benefit per se, but the bonus points that come with the credit card can help you get the Southwest Companion Pass.
Credit Card Benefits that Make Travel Better
This group of benefits can make your travel days much more enjoyable.
Lounge access can be a game-changer. Generally, this benefit comes with having the card, but there may be other requirements. Many premium credit cards offer Priority Pass membership—which gives you access to more than 1,000 airport lounges worldwide. You'll need to request this benefit from the bank that issues your rewards card. Then, you'll receive a Priority Pass card in the mail. Just present it at the lounge and you'll be admitted at no additional cost.
Cards that offer airline-specific lounge access typically require you to be flying with that airline. For example, if you have the Citi® / AAdvantage® Executive World Elite™ Mastercard®, you can access Admirals Club lounges, but only if you have a same-day ticket with American Airlines or one of their partners.
Related: Best Cards for Airport Lounge Access
Expedited Security: TSA Pre✓, Global Entry, and CLEAR
Another credit card benefit that can make travel better is access to expedited airport security. Some cards offer a statement credit for access to either TSA Pre✓ or Global Entry. Cards that offer this benefit generally have exactly the same benefit—a reimbursement of up to $100 for either TSA Pre✓ or Global Entry, every five years.
Since membership in Global Entry also provides TSA Pre✓, it's usually a better idea to apply for Global Entry. One important note is that your $100 reimbursement can be used to reimburse the fees for any traveler. So, if you have multiple cards that offer this benefit, you can use one of your reimbursements for a friend or family member.
Some United or Delta co-branded credit cards give a discount on membership to CLEAR (normally $179 / year). CLEAR is another program that can work instead of or in conjunction with TSA Pre✓ to reduce the amount of time it takes you to get through airport security. The American Express® Green Card (full review) is the best card for CLEAR, offering a $100 statement credit towards membership each year.
Related: Should you Register for CLEAR?
Luxury Hotel Collections
Several premium credit cards offer access to reduced prices and elite benefits even if you're not an elite member. Two examples of these types of programs are Fine Hotels & Resorts (from American Express) and the Luxury Hotel & Resort Collection (from Chase). If you have a credit card that offers one of these programs, you get access to a special website where you can make these hotel bookings. Hotels booked through these programs often provide things like complimentary breakfast, late checkout, room upgrades, and a credit to use for food or drinks at the hotel.
Hotel Elite Status
Many hotel cards offer either outright elite status or elite credit that will help you reach the next level when combined with your normal travel. The actual enhancements that come with elite status depend on the hotel program and what level of status you receive. Common benefits of hotel elite status include complimentary room upgrades when available, late checkout, and earning more points on every dollar you spend. Some of the best programs offer a benefit like a fourth or fifth night free on award stays.
Airline Elite Status
With airline cards, it’s more common to earn benefits that will make your travel experience more like being an elite member—without actually awarding status. For example, you may get priority check-in and boarding or free checked bags.
In addition to a la carte benefits, there are also a few airline cards that offer elite qualifying miles to help you reach the next level of status. Others may grant a waiver that allows you to earn status without meeting a requirement to spend a certain amount of money on airfare. These benefits are typically activated by reaching a spending threshold on your card.
The Bottom Line
As you can see, there are a wide variety of different benefits that come with various credit cards. Knowing what benefits are out there can help you decide which credit cards make sense for you. And maybe you even learned about a benefit that changes the value you'll get with a card you already have.
Did you learn anything new from this post? Please let us know in the comments!
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