Can Credit Cards Help Me Travel?

Dear Fathom: I see tons of ads for credit cards touting travel benefits and would like to know the truth about how useful (or not) they actually are. What can my card do for me if I get stuck at an airport because my flight is delayed or canceled? What about if I am robbed? Attacked by a gila monster?

There's nothing worse than having things go haywire while you're away from home. We turned to Michael Dolen, editor-in-chief of Credit Card Forum, to demystify those powerful slips of plastic. He eats, sleeps, and breathes credit cards and has so many of them, he's too embarrassed to tell us the number. 

Some travel benefits are invaluable, while others are utterly useless (but you won't hear those commercials say that). Remember these guidelines:

1. The rules for a given benefit can vary greatly by card. As boring as it may be, make sure you read the fine print and legalese so you know what to expect.

2. Card issuers occasionally make it tedious to file a claim for benefits, hoping you won't bother with the hassle. Don't let them off the hook.

3. A lot of benefits go unused because cardholders aren't aware of them. If you're unsure of your benefits, call and ask.

Now let's go over a few specific travel nightmares and how a credit card might help.

I'm stuck at the airport because a hurricane has grounded all flights. Now what?

A few cards toss in trip delay insurance. They will cough up a couple hundred bucks or so per day for lodging, food, and other expenses if your flight is delayed. The $60 Discover Escape probably has the most lax requirements — coverage kicks in for delays of six hours or more. Contrast that to the Chase Sapphire cards, which only applies after you've been through a gruesome twelve hours. Surprisingly, the only American Express that offers this perk is their co-branded PenFed Premium Travel Rewards (you rarely hear about this hidden gem since a credit union issues it).

If the delay is so bad it forces you to cancel your trip (i.e. it means missing the departure of your cruise ship), that's where trip cancellation insurance will come in handy. Assuming you paid using your card, you can get reimbursed for the trip, usually up to a few thousand dollars. This benefit is much more common, as you will find it on World MasterCards from numerous issuers. Chase also includes it on several Visa cards. Once again, AmEx falls short and actually charges extra for it.

What if my delay is just a couple of hours?

In an airport, that can seem like an eternity. However, if you have a credit card that gives you free airport lounge access, it might be a tad more bearable. These sanctuaries have comfortable seating, snacks — and my favorite part — complimentary beer and wine, which is definitely useful during trying times.

Which cards offer access? Your best bet is the no annual fee PenFed card (mentioned above) because it throws in a Priority Pass membership as long as you spend at least $15,000 annually. For access to AA Admirals Club or Delta Sky Club, you typically need to be a holder of the affiliated airline's highest tier card, or an American Express Platinum that has partnered with them (sadly, the Platinum comes with a $450 price tag).

Got to my destination but now my luggage is missing, maybe stolen?

This happens a lot. Fortunately, lost luggage insurance is one of the most common travel benefits. You will see it on all sorts of cards, even those which charge no annual fee. There are a couple important caveats to point out with this perk.

1. You probably won't be covered if the luggage was in your possession. If you're distracted at the magazine stand and some con-man walks by and swipes your suitcase, you're out of luck. On the other hand, if the airline loses your bag then you may qualify for reimbursement.

2. With most credit cards it's secondary coverage: It won't pay out until you exhaust all other options. This includes the airline policy and, if applicable, any additional travel or household insurance policies which may cover you. If you're still owed money after all that, then the credit card company will pay out, usually a max of around a thousand or two.

Conclusion? More often than not, this benefit is of little help (at least in the short term). That said, those with premium cards like the Centurion might not have all the hoops to jump through. When I worked at Fred Segal a few years back, Jude Law strolled in needing clothes ASAP. Why? His luggage was lost. Reportedly his Centurion card credited him immediately for $3,000 (if I recall correctly) to buy new rags. The rest of us won't get that same red carpet treatment.

I'm a million miles from home and have a medical emergency. Now what?

Whether it's a monster attack or a ruptured appendix, your credit card will likely be of very little use. Many cards these days do include a toll-free hotline you can call for medical referrals, but that's about it. The cost will be your responsibility. Not even AmEx Platinum or Centurion will pay for medical care, but under some circumstances they will pay for transportation to a better facility.

Before you depart, you may wish to purchase a policy. American Express offers travel medical insurance for an extra monthly or yearly fee. Other companies sell similar plans on a per trip basis.

My card has travel accident insurance as a benefit. What about that?

This benefit can be confusing because of the name. It doesn't cover medical care for anything. It's more along the lines of a life insurance benefit, and it's only applicable to Common Carrier travel (i.e. being a passenger on a commercial plane). If you die or lose a limb because the plane crashes, it will pay out a pre-determined amount. In other words, this benefit is of most use if we die. Pretty disappointing, huh?

Have a travel question that feels like an itch you can't scratch? We're here to help. Drop us a line at askfathom@fathomaway.com.