Living with credit, Protecting yourself, Shopping, Travel

When Discover cuts benefits, I’ll use another card

Kelly Dilworth

For years, I’ve taken my credit card benefits, such as rental car insurance and an extended warranty, for granted. Not anymore. With Discover canceling some card benefits in February, I’m realizing I will lose a lot when those extra perks disappear.

Discover notified cardholders in December that it’s planning to cut five travel and purchase benefits from its credit cards on Feb. 28. The benefits on the chopping block – rental car insurance, extended warranty, purchase and return protection, and flight accident insurance.

When I reached out to Discover to ask why it was axing the five benefits, it said cardholders rarely used them. Instead, Discover plans to focus on other card benefits, such as ID theft alerts, says Discover spokesman Derek Cuculich.

“We will be continuing to invest in benefits which our card members find most useful,” he wrote in an email. “For example, identity security has been an increased concern for our card members, so we recently launched Social Security Alerts.

“We are regularly evaluating our products in an effort to provide the best possible experience.”

Benefits cardholders hope they’ll never need

Discover may be right that few cardholders take advantage of these benefits, but the insurance protections that many credit cards offer are benefits that cardholders hope they’ll never need.

For example, the flight accident insurance that Discover is cutting provides surviving family members, such as your children or spouse, with accidental death benefits in case you’re in an airplane accident. I’m glad I’ve never used that benefit!

I’ve also never had to use my Discover card’s car rental insurance coverage or extended warranty, but I’ve been glad to have that coverage.

Card protections and insurance are part of the reason why I like to use a credit card instead of a check or debit card for certain types of transactions. If I ever need help paying for a car rental accident or getting reimbursed for a stolen purchase, my credit card protections could save me a ton of money.

Now that my Discover it Miles credit card will no longer offer car rental coverage, I won’t use it to pay for a car rental. Instead, I’ll opt for another, more generous card, such as my husband’s Chase Sapphire Reserve.

Free credit card benefits would be pricey to replace

Car rental insurance is expensive. A damage waiver directly from a car rental company, for example, can cost as much as $8.99 to $29.99 a day.

Extended warranties also are notoriously pricey and rarely worth the money when you buy them from a store. According to a 2016 survey by Consumer Reports, for example, the median price of an extended warranty for an appliance cost $123.

Having free access to extended warranty through your card is a big plus and makes a costly purchase such as a new washing machine or fridge less scary.

Similarly, purchase security and return protection also could save you a significant amount of cash if you lose a new purchase or try to return something and the seller won’t take it back.

Hopefully, other card companies won’t follow Discover’s lead and cut these benefits, too. If they do, consumers will be losing a lot of benefits that many take for granted.

See related: Know your card’s insurance coverage before you travel, How card travel insurance can save you bucks, headaches, Purchase protection survey: Which cards offer them, Ignoring card benefits is leaving money on the table

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