Understanding Credit Card Purchase and Travel Protections and Benefits

Many people seem to be unaware of the different benefits and protections that their credit cards offer them. Some of these protections can be extremely valuable, especially those offered by the more “premium” cards. Here are some things to consider when reviewing the terms of your credit card’s benefits and protections and some insight into the different protections offered by these cards.

Who is covered?

Always make sure you have a clear understanding of who exactly is covered by the benefit. Typically, it’s the cardholder and then for travel protections is also applies to immediate family members (spouse, children, etc.).  

Many of these benefits apply if you use reward points to pay for the travel or even if you only pay for a portion of an expense with your credit card. So for example, if you only pay for the fees for an award ticket with your credit card, you’ll probably still be able to take advantage of the travel protections and benefits. For purchase protections, however, the coverage is often limited to the amount you placed on the card and some protections may only kick in if you use your card for the entire amount. 

Keep excellent records 

For many of these benefits and protections, you’ll have to supply adequate documentation to successfully file a claim. So keep all the receipts, medical records, photos, emails, etc., so that you’ll always have an adequate record. And when you receive a determination on whether or not a protection will apply from a bank, request their determination in writing.  

Car rental insurance 

Most rewards cards offer some form of insurance (often called “auto rental collision damage waiver”) when renting a vehicle that comes in two forms. Primary and secondary coverage.

Primary coverage usually means that you don’t have to file a claim with your insurance company, so the coverage process is much more straight forward and can help you avoid having your premiums rise. Secondary coverage means that you’ll likely have to file a claim with your insurance company and you might be responsible for certain fees, such as deductibles. For those reasons, primary rental car insurance if obviously the preferred option and sometimes can make the annual fee worth paying by itself.

Several cards now offer primary coverage and many of them are from Chase. Here’s a list of some of those cards: 

• Sapphire Reserve
• Sapphire Preferred
• Chase Ink Plus
• Chase Ink Business Preferred
• United MileagePlus Explorer Card (and Club Cards)
• Ritz-Carlton Rewards Credit Card
• Southwest Premier Business
• CitiBusiness AAdvantgae Platinum Select
• Citi Prestige (outside the US)

Note: Business credit cards often limit their insurance protections to travel taking place on business. 

Even if you have primary rental car insurance, you’ll still need to make sure you’re aware about the limitations for coverage. Many plans have strict limits on the type of vehicles covered (no trucks, exotic vehicles, etc.), the time period covered (e.g., no rentals longer than 30 days), and even geographical restrictions on what country you’re covered in or what type of terrain you can drive on (no gravel, off-road, etc.). Typically, you and whoever else is authorized to drive the vehicle per the terms of the rental agreement are covered by the benefit. The terms for rental car insurance can vary a lot, so always make sure you read up on them closely.  

Roadside assistance

Many credit cards offer road side assitance services to assist you when you need:

• Fuel
• Flat tire (usually you need a spare)
• Towing
• Jump start
• Winching
• Lockout services

Typically these benefits are limited with reason so it’s important to have an idea of their limitations (e.g., towing up to 10 miles, two gallons of fuel, cardmember must be present, etc.) Some of these roadside services are complimentary with card membership with certain cards but you’ll have to pay a fee for others. Typically, the “higher up” your card, the better the coverage. 

For example, the Chase Sapphire Reserve  will cover you up to $50 for most services. However, the Chase Sapphire Preferred requires you to pay $60 per service call. Also, for American Express cards, you are offered roadside service but only some of the cards offer “premium” services that offer complimentary services. For example, with the Premier Rewards Gold Card or Platinum Card from American Express you can take advantage of free roadside services up to four times per year. 

Lost or damaged luggage 

This benefit covers you for expenses to repair or replace your checked-in baggage or carry-ons that were damaged while traveling on a common carrier. Some credit cards lump both carry-on and checked-in baggage together while others have separate limits for each. For example, the Platinum Card from American Express offers a $3,000 limit for checked baggage and a $2,000 limit for carry-ons. 

Many of these cards set a limit at around $3,000 but may also set a lower limit for certain types of personal property such as jewelry and electronics. For example, the Chase Sapphire Preferred has a $3,000 limit but also sets a $500 limit for watches, cameras, jewelry, etc. 

There’s usually a time limit of up to 90 days for filing these claims but it’s really important to file your claim as soon possible to prove that the damage didn’t occur later. This benefit, like most others, is usually in excess of whatever type of travel insurance you currently have. 

Trip delay 

When your travels are delayed by a common carrier up to a certain point due to a “covered hazard,” you can be eligible for reimbursement for things like meals, lodging, ground transportation, toiletries, medication, and other personal items. Covered hazards include common occurrences like equipment failures, inclement weather, and labor strikes, but can even cover things like hijacking/skyjacking. Some cards, such as the Citi Prestige, even allow this benefit to apply when your passport is lost or stolen. This benefit is typically limited to around $500 per traveler. 

You are not covered for any covered hazard delay that was made public or known to you prior to the departure for the covered trip, so always use due diligence. 

The best card for trip delay delay is probably the Citi Prestige because it has one of the shortest delay periods of only 3 hours. Compare that to the 6 hour wait time for the Sapphire Reserve and the 12 hour wait time for the Sapphire Preferred. Unfortunately, this a benefit you must pay extra for to get coverage from American Express. 

Baggage delay 

This benefit is similar to trip delay but isn’t quite as broad since it focuses on your checked luggage. When your checked bags are delayed substantially you can get reimbursed for essential items, such as clothes, toiletries, charging cables, etc. Again, the Citi Prestige offers one of the best baggage delay policies, as you only have to wait 3 hours for it to kick in. This is also usually limited to about $500 total per person or $100 per day. 

Trip cancellation or interruption

With the trip cancellation  benefit, you and others can be reimbursed when a “covered loss” prevents you from traveling and results in cancellation of pre-paid tours, trips, vacations, etc. What constitutes a covered loss varies but it often covers sickness (will require doctor’s letter), death, injury, weather issues, etc. It gets more iffy with personal changes in circumstances, as some cars like the Sapphires exclude “financial circumstances, and any business or contractual obligations” but other cards like the Prestige cover being laid off or fired, so always check your terms and call to clarify if needed. The Chase Sapphire Reserve and Preferred cards offer this protection up to $10,000 while the Citi Prestige offers it up to $5,000.

The trip interruption benefit is very similar but usually comes into effect on the way to the point of departure or after the departure of the covered trip. Just be weary about traveling while sick or against a doctor’s advice because you may not be able to get covered in that case.

Purchase protection 

If an item is lost or stolen usually within 90 to 120 days you can covered up to a certain amount. Now some of the best cards offer protection up to $10,000, although your coverage is usually limited to what you put on the card.  Some items that are usually excluded from this protection are the following:

• Animals, plants, collectibles
• Boats, vehicles, etc.
• Currency or cash equivalents
• Tickets to events or transportation
• Purchases for services
• Damage from an act of God
• Using a product in a way it wasn’t intended on being used
• Ordinary wear and tear
• Used items

Some cards that offer solid purchase protection are:

• American Express Premier Rewards Gold Card and Platinum Card: $10,000 per item
• Sapphire Reserve: up to $10,000 
• Citi Prestige: up to $10,000

Extended warranty 

This benefit usually add 1 to 2 years to the manufacture’s warranty up to a certain amount and time frame.

Both the Chase Sapphire cards extend the time period of the original manufacturer’s written U.S. repair warranty by 1 additional year on eligible warranties of three years or less, up to a maximum of $10,000.00 dollars per claim. American Express cards like the Platinum and the Premier Rewards Gold Card both offer one additional year if the original manufacturer’s warranty is between one year and five years limited up to a maximum of $10,000 per occurrence. The Citi Prestige is a bit different and extends warranty by 2 years but not to exceed 7 total years. 

Price protection 

Price protection will allow you to be reimbursed for the difference in price if the price of an identical product goes down after you purchase it. Most cards require you to keep copies of your original receipt and then submit proof of the lower price in the form of an advertisement, although Citibank actually has “Price Rewind” where they will search for lower prices upon registration (you can still submit your own requests, too).

Pay attention to the deadline for filing your price protection claim, as they are typically within 60 days of purchase. There may also be deadlines that start from the date that you spot the lower price. For example, the Chase Sapphire Reserve requires you to call the benefit administrator within 21 days of the date of the advertisement. For cards like the Sapphire Reserve and Citi Prestige, you can count on being protected up to $500 per item ($2,500 total per year) but some other cards limit this benefit to $300 per item. 

Return protection 

Return protection reimburses you for items that the store won’t allow you to return. Some products will be excluded and here’s a list of many of the excluded products for the Chase Sapphire Reserve: 

• Animals and living plants
• Boats, automobiles, aircraft, and any other motorized vehicles  
• Cash, bullion, travelers checks, tickets
• Computer software
• Damaged/non-working items
• Formal attire including, but not limited to, cocktail dresses, tuxedos, gowns, and formal accessories
• Items purchased for resale, professional, or commercial use
• Items purchased outside of the United States
• Items upon which alterations have been made
• Jewelry, art objects, rare or precious coins or stamps, antiques, and collectible items
• Seasonal items including, but not limited to, holiday decorations

Some cards will require you to put the purchase entirely on your card or with reward points, so be on the lookout for that. 

Some examples of cards that offer this protection:

• Citi Prestige: within 90 days of purchase, up to $500 per item, $2,500 per year.
• Chase Sapphire Reserve: within 90 days of purchase, up to $500 per item, $1,000 per year.
• American Express Platinum: within 90 days of purchase, up to $300 per item, $1,000 per year.

Final word

Credit card protections can be very valuable and are one of the primary reasons to make purchases on your credit card (in addition to earning points of course). Always make sure that you are reading an up to date policy for your specific card very carefully so you know exactly what you are entitled to. If you do your homework, you shouldn’t have an hard time getting covered.