Living with credit, Protecting yourself, Travel

Card benefit cuts could cost you on your next vacation

Kelly Dilworth

Before you embark on a summer vacation, double-check whether your credit cards still offer money-saving benefits, such as car rental insurance or trip cancellation protection.

A growing number of credit card issuers are trimming benefits – or eliminating some of the benefits altogether.

How this affects my family: I have switched my family’s go-to card for car rentals because Discover cut five card benefits, including rental car coverage, in February. When we next rent a car, we will use my husband’s Chase Sapphire Reserve, which has primary coverage as a card benefit.

How will these reduced benefits affect your family’s summer vacation plans?


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How travel benefits can cut vacation costs

Nearly half of Americans planning a summer getaway this year say credit cards (rather than cash or debit) are their most preferred way to pay for travel expenses, a recent Discover survey found.

For cardholders who can afford to pay off their credit card charges in full, financing a vacation with a card is typically a smart move. Many credit cards come packed with travel-friendly benefits that can save you a ton of money if your travel plans go awry.

Among travel-oriented benefits on credit cards:

Trip cancellation protection: You can book a trip knowing that you’ll be refunded if unforeseen events, such as illness or bad weather, force you to scrap your plans.

Lost baggage protection: This will cover the costs of replacing your clothes and other items if your luggage goes missing. Some credit cards even will help if your trip or baggage is delayed.

Car rental coverage: If you crash or damage your rental car, it won’t be a financial catastrophe – if your card issuer still offers this coverage.

Card issuers and their benefit cuts

Discover was the first card issuer this year to scale back the benefits its cards offer. In February, Discover dropped five card perks, including car rental insurance, flight accident protection, purchase and return protection and extended warranty.

Chase recently notified United MileagePlus Explorer cardholders that, as of June 1, cardholders could only get back a maximum of $1,500 if a trip is unexpectedly canceled – down from a previous cap of $10,000. It’s not all bad news for Explorer cardholders, though.

Chase added new benefits to the Explorer card as others were being removed. Among the changes, cardholders now get a $100 fee credit for TSA Precheck or Global Entry.

Chase also is scaling back airport lounge benefits on its super premium Chase Sapphire Reserve card. Beginning August 26, Sapphire Reserve cardholders will no longer be allowed to bring more than two free guests into Priority Pass airport lounges. All other guests will have to pay $27 to visit the lounges.

Chase also will stop awarding bonus points to travel purchases that are refunded by the Sapphire Reserve card’s $300 travel credit.

Citi, too, is trimming travel benefits on some of its cards.

For example, Citi Double Cash Card cardholders planning late summer road trips may want to get an AAA membership first. After July 29, roadside assistance dispatch service is ending, as are travel and emergency assistance benefits. Also, worldwide car rental insurance will no longer cover charges or expenses for the loss of use of the rental car, rental agency fees or taxes.

Prestige cardholders, meanwhile, have several travel-related protections changing. Trip delay coverage will kick in after your trip is delayed six hours instead of three. Trip delay, cancellation and interruption protection, lost baggage protection and travel and emergency assistance will no longer cover traveling companions, just immediate family.

Maximum worldwide car rental insurance coverage for Prestige cardholders will be reduced to $75,000 from $100,000.

Check your card benefit coverage now

Yes, Discover, Chase and Citi are cutting some card benefits (travel and otherwise), but American Express is bucking the trend by improving its price protection and extended warranty benefits on some cards.

My advice: Do what my husband and I did. Before you go on a trip, check to make sure your credit cards still offer coverage before you use it to pay for a big purchase, such as a flight or a rental car. You could end up regretting it big-time if you accidentally use a card that no longer offers travel protection and then need it later.

Even cuts to purchase-related benefits, such as price protection or return protection, could cost you money if you charge vacation-related goods, such as a new tent or campfire equipment, and then find cheaper prices on those items later.

If your favorite credit card has stopped offering travel benefits, consider applying for a new rewards card that includes more robust insurance coverage.

Premium travel cards frequently offer the best travel-related benefits, but you also should be able to find key benefits, such as car rental coverage, on cards with no annual fee.

See related: 11 credit card travel insurance benefits, How credit card travel insurance can save you bucks and headaches

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