Do you know your credit card’s superpowers?
Oh sure, you probably know about fraud protection and cash back or travel rewards.
But did you know your credit card can reimburse you for something that was damaged, stolen or (possibly) just lost? Or that you automatically get an extended warranty beyond most manufacturer warranties just by purchasing something with your card?
Did you know some cards will step in when you book a rental car and be your primary car insurance, so that if you have an accident you don’t even need to file a claim with your regular car insurance company? Others will pay for your insurance deductible.
Did you know your credit card likely comes with hundreds of thousands of dollars of accidental death and dismemberment insurance automatically when you use it to pay for things like taxis, flights, and cruises?
Often we think of credit cards as an alternative to cash, and yet many offer valuable perks we forget about.
Every card comes with a cardholder agreement that contains a statement of benefits associated with that card, and while many cards share the same benefits as others in their class, you should look at the benefits specific to your card. You can often find a copy online, too, somewhere in your account documents.
We have five different cards in my house: Chase Sapphire Reserve, Chase Sapphire Preferred, Chase Southwest Rapid Rewards Premier, Chase Southwest Rapid Reward Plus, and Capital One Quicksilver. Let’s look at some of the common benefits and some of those specific to individual cards.
This perk blows my mind. Basically, if an item you buy with your credit card is stolen or damaged within a certain number of days of purchase, you could get it repaired or replaced on the credit card company’s dime.
As I said, different cards have different coverages. My Capital One card, for instance, will:
“At the Benefit Administrator’s discretion, replace, repair, or reimburse you for eligible items of personal property purchased entirely with your eligible Visa card in the event of theft, damage due to fire, vandalism, or accidentally discharged water, or certain weather conditions within the first ninety (90) days of the purchase date. This benefit is limited to a maximum of five hundred dollars ($500.00) per claim and fifty thousand dollars ($50,000.00) per cardholder.”
That’s awesome, but the Chase cards are even better. Even though both the Capital One and Chase Southwest Rapid Rewards Premier are Visa Signature cards, the Chase card increases the coverage window to 120 days, also covers gifts you give to others AND adds coverage for “involuntary and accidental parting with property.”
That last bit is defined as “unintended separation from an item of personal property in which the item’s location is known but recovery is impractical to complete.”
Let me give you a real-life example.
For Christmas a few years ago, my son got an iPad. A few weeks later, he was in a panic. He was gathering his stuff getting off the light rail train, set down the iPad while he grabbed the rest of his things, and rushed off the train before it took off. He forgot the iPad on the seat.
He called the train’s lost and found, called police, tried to find it on local classifieds sites. Nothing. Had I purchased it with any of three of the Chase cards we now have (and didn’t at the time), I could have filed a claim and gotten $500 back.
The Chase Sapphire Reserve has even better coverage, which makes sense given its $450 annual fee. That card increases the payback amount to $10,000 per claim and $50,000 per year.
Now, it’s worth noting that these coverages apply after any other applicable insurance you may have, such as homeowners, renters, or automobile insurance. My homeowners would cover theft of an iPad outside the home, but it doesn’t cover forgetfulness. So the Chase cards would be my first option there.
Every one of these cards carries an automatic warranty extension of one year beyond a manufacturer’s warranty of three years or less.
If your home theater system gives up the ghost three months after the original warranty expires — as I think they’re built to do — you could file a claim with the credit card company for repair or replacement if you’ve got a copy of the receipt showing the purchase and proof it was purchased on the card.
While you may already be a hoarder and have seven years of receipts in an overstuffed plastic bin somewhere, I would suggest just taking a picture of the receipt on your phone and saving it to a cloud service like Evernote or Dropbox. Tag the image with the date, store, card used and any item you think you might be worth filing a claim for in the future. There’s no need to go crazy here; just snap it for items over $100 that have a good chance of dying.
It’s worth noting that this is usually secondary to any extended warranty you may have purchased, so if you’re one of those people who does that, stop it! You’re covered.
Trip cancellation or interruption
Just our Chase Sapphire cards come with this protection. Under certain circumstances, I could be reimbursed up to $10,000 if something prevents me or my family “from traveling on or before the departure date and results in cancellation of travel.” Valid reasons include:
- Accidental injury, death, sickness by you, immediately family member or traveling companion
- Severe weather
- Military orders
- Terrorist action or hijacking
- Jury duty or subpoena from courts that can’t be postponed or waived
- Finding your or traveling companion’s dwelling to be uninhabitable (?!)
- Doctor’s orders or quarantine
- Travel provider goes out of business
What isn’t covered by this provision?
- Travel changed by carrier, travel operator or agency unless due to weather or strike
- Change in plans or financial circumstances
- Pre-existing condition
- Injury due to something to do with a felony, incarceration, car racing, prize fighting, rocket-launched aircraft or suicide.
This is a more common protection, and it’s available on all of our cards.
Checked and carry-on luggage is insured up to $3,000 if it is stolen or lost due to the common carrier (airline, cruise, etc.) “misdirecting” it.
This one varies from card to card. The Capital One card, frankly, excludes so many items and has so many caveats that I can’t imagine any reimbursement being worth the time to get it. The Chase cards, however, have much narrower exclusions and fewer caveats. I could see that being worth it in some cases.
Accidental death and dismemberment
No one wants to have to claim this insurance, but in the event something covered by it happens, it sure is nice to get some money to help get you through the life changes. We’ve all heard stories of people who have a heart attack and die on an airplane, or fall off a cruise ship and disappear, or are killed in a train or bus crash.
The coverage varies among my cards, from $250,000 if the full cost of the common carrier fare was paid on the Capital One card to $1 million if some portion of the cost was paid for on the Sapphire Reserve. (A quick note here that the Reserve’s generous increases in the coverage limits on many of these really help justify the annual fee if you actually use them.)
You and your immediate family members are covered in the event someone dies, but also to varying degrees for things like loss of speech, hearing, or vision, as well as loss of hands, feet or some fingers.
Auto rental collision damage waiver
Again, the Sapphire Reserve card ups the ante on this coverage. While all my other cards include this as secondary coverage, meaning it only kicks in when costs exceed what is covered by other insurance policies you have, the Reserve card acts as the primary insurance. That means I could file a claim with Chase in the event my rental car is involved in an accident and not have to file a claim with my car insurance company, potentially saving me hundreds of dollars on my next renewal.
This one is only on the Chase Sapphire cards, both the Reserve and Preferred. It will reimburse you the difference between the price you paid for an item purchased with your card and the price of the same item advertised within 90 days of your purchase. You can receive up to $500 per claim and $2,500 per year.
There are restrictions about what constitutes a valid advertised price (no auction sites, for instance), but it doesn’t take too many of these to make back your annual fee. I plan to buy a new laptop soon, and you better believe I’ll be setting up a price alert for 90 days after my purchase looking for a better deal.
Again, these are only on my Chase Sapphire cards. In the event you purchase something from a store and decide you don’t want it within 90 days — and it’s like-new but the store won’t take it back — you could get up to $500 per item and $1,000 per year by sending it to the credit card benefits administrator.
Naturally, there are limits to what they’ll take off your hands, but from what I can tell it’s a pretty generous policy. In fact, it doesn’t even appear to limit clearance items you might buy from the store with a no-return policy for clearance items!
Emergency evacuation and transportation
This feature is only available on the Chase Sapphire Reserve. It allows, with benefit administrator pre-approval, for your expenses to be covered in the event you have a medical emergency that requires evacuation during a trip for which you paid at least part of the cost on your card. It must be a trip of between five and 60 days, and must bring you at least 100 miles from your home. The coverage is limited to $100,000. This is secondary coverage, so any other policy you may have with this coverage will be first in line.
In addition, if you are hospitalized for eight days or more, the coverage will pay to fly a family member to your bedside. And in the event you die, up to $1,000 of expenses to bring your remains back to your home country is covered.
The more you know
I honestly can’t say I’ve ever thought about checking my credit card agreement for most of these events. The one you hear about most is the car rental provision, but often your existing auto insurance policy takes care of that.
I will definitely think of these in the future, and I’ll think about them when I hear people’s travel horror stories and wonder if they might be eligible for any benefits.
If you have had any experience filing a claim with a credit card benefits administrator for any of these or other additional coverages, I would love to hear about them in the comments!
Nice post! I need to read my credit card agreement again to see what I’ve forgotten about!
Great post! I am a big fan of using cash back credit cards (provided the balances are paid in full each month) and this list of benefits you highlight is just icing on the proverbial credit card cake. So many people are scared of credit cards or have sworn them off completely and that’s cool if that is what works for them, but they can definitely offer a lot of advantages as well when used responsibly.
Agreed. We pay them off every month and the rewards are great when you do that. I was just amazed how many other perks you can get out of them that aren’t travel rewards based!
I just checked my Chase Freedom benes and it has a lot of what is said here. I don’t think to even use the benes ! There are many regulations/restrictions but still, it’s a good thing to know.
Nice post. There are many benefits to using credit cards. Even though the benefits are great, they are not for everyone. If a person lacks the discipline to pay their balance every month, they are better off using cash. If you are disciplined however, the protection and points are wonderful.
So many hidden benefits… it’s awesome! My favorites are the travel and rental car insurance – it’s great knowing you have these when booking a trip along with a rental car.
The stolen/damaged/lost property options are ones that I’ve never paid much attention to, but I will now.
Appreciated this post!
I had no idea our credit cards covered lost/stolen items to a degree. Just one more reason all of our purchases go through our credit cards – and then are paid off every month, of course 😉
I’ve missed out on so many credit card benefits simply because I forgot I had access to them. This article brought up some bad memories. haha
Mind BLOWN. I had no idea!!! And because I’m a huge nerd, I’m going to go check the benefits on my credit cards STAT. This is so exciting.