7 Things a Credit Card Can Do That a Debit Card Can’t

Photo (cc) by Andres Rueda

This post comes from partner site lowcards.com.

Credit cards have become an easy target for Congressional grandstanding and 
regulations, but beneath the widely criticized rates and fees lie many good 
benefits that are usually hidden in the fine print.

Credit cards can provide
 valuable purchase protections and insurance that are unmatched by cash and
 debit cards. Yet more consumers are forgoing these benefits and choosing debit cards 
instead. Total payment volume for debit cards
 surpassed credit card volume for the first time in 2009 – and it will continue to 
expand in 2010, according to a new report from Javelin Strategy & Research.

More than half – 56 percent – of consumers said they had used a credit card in the past month, down
 from 87 percent in 2007. The study predicts that figure will drop to 45 percent by 2020.

“Many consumers are switching to debit cards, but there are times when using
a credit card is your best choice, especially for tickets and 
large purchases,” says Bill Hardekopf, CEO of LowCards.com and author of The Credit
Card Guidebook. “However, insurance and purchase protections vary by card
 and issuer, so it’s a good idea to research these when comparing credit
cards.”

Here are some of the extra benefits offered by many credit cards…

1. Car rental loss/damage insurance

With a number of issuers, using your credit card can cover damage 
incurred when renting a car, so you may not have to pay for the
 extra insurance coverage that car rental companies try to sell. To 
be safe, be sure to check the description of this coverage in your 
Cardmember Agreement. You must be the primary renter and use
 your card for the rental. To be covered by the car rental loss/damage 
insurance, you must decline the collision damage waiver (CDW) or 
similar option when you are reserving and picking up your rental car. 
Coverage applies for the first 30 days, and is in excess to your other 
sources of insurance. Coverage may not be available in some countries.

Typical exclusions include: items stolen from inside or outside the vehicle;
 person not designated in the rental agreement/contract as an authorized
 driver; loss that occurs while driving under the influence of drugs or 
alcohol; racing or reckless driving; blowout or tire/rim damage that is not
 caused by theft or vandalism or is not a result of a vehicle collision
 causing tire or rim damage.

2. Price protection

Price protection helps a consumer get the best price you can find on the 
products you buy. Many issuers will refund the price difference if you find
 a lower price on the same item from the same manufacturer within a
 designated time period (typically 60 days). Issuers will set a refund limit.
 For example, Citi refunds the price difference up to $250 per item.

Standard exceptions include: internet purchases or advertisements; items 
subject to rebate or manufacturer’s coupon or a refund; items sold at “going 
out of business sales or “close out” advertisements; and customized items.
 Price protection does not cover airline and transportation tickets,
 travelers checks, cash or its equivalent.

To get the price protection, save the printed advertisement and contact the
 program administrator for claim forms and filing procedures.

3. Purchase protection

Purchase protection protects eligible purchases against accidental damage or 
theft for up to 90 days from the date of purchase. It can repair, replace or 
reimburse for up to the amount charged. For example, American Express 
coverage is limited to up to $1,000 per occurrence, and up to $50,000 per
card member account per policy year. It is in excess of other sources of 
indemnity.

If a retailer will not accept a return within the first 90 days of purchase,
 some cards, like Chase Sapphire, will reimburse you for the cost of the item 
purchased on your card.

4. Extended warranty protection

This protection extends the length of the free repair period under the
 original manufacturer’s U.S. warranty up to one additional year. The
 warranty must be three years or less.

Capital One doubles the original warranty time period and duplicates the 
coverage of the original manufacturer’s warranty up to a maximum of twelve 
months on most items you purchase. If you fail to properly register the 
original warranty as required by the manufacturer, the Extended Warranty will only double the actual warranty time period that you received from the 
manufacturer.

To receive extended warranty protection, you must submit the store receipt, 
the credit card receipt and a copy of the manufacturer’s warranty.

5. Common carrier lost luggage coverage

If you purchase your common carrier tickets with your credit card, lost 
luggage coverage will cover you and your dependents for permanently lost,
 stolen, or damaged bags while checked with your carrier. Coverage is
 secondary to the carrier’s liability and applies after that coverage has 
been exhausted.

Coverage varies by issuer. Citi’s coverage for checked bags is up to $3,000 
per occurrence per covered person, up to $10,000 total. American Express’
 coverage is up to $1,250 for lost, stolen or damaged carry-on baggage, and
 up to $500 for checked baggage. This is in excess of the Common Carrier’s 
liability and includes up to $250 of coverage for high-risk items, such as
 computers, jewelry and electronics.

6. Trip cancellation and trip interruption coverage

To get the coverage, you must purchase the trip entirely with your credit 
card. If certificates, vouchers, or frequent flier miles are used, any
 remaining charge for the trip must be paid entirely with the credit card. 
Coverage is typically limited to the lesser of $1,500 per calendar year or
 the original cost of the ticket.

If your trip is interrupted for a covered reason, you will be reimbursed for 
the travel on the carrier to your return destination or to join your 
group at their current location. Exclusions include: pre-existing medical conditions; participating in bodily contact sports; non-emergency treatment 
or surgery; pregnancy and childbirth (except for complications).
 Coverage is limited to the amount not covered by another insurance or 
indemnity. Some cards offer this coverage for free while others may charge a
 premium.

7. Roadside assistance

Some cards offer roadside assistance for gas delivery, tire changes,
 jump-starts, etc. The fees for the services are usually pre-negotiated and
 will be billed to your account. If you have a rental vehicle, call the car 
rental agency before you call your credit card company because many rental
 agencies have special procedures regarding emergency road service.

Other perks

Some cards offer even more benefits…

Medical prescription replacement assistance: If medications are lost or forgotten, some card issuers will help you 
in obtaining new prescriptions.

Doctor referral/emergency medical transportation assistance: If you or another covered family member becomes injured or ill while 
traveling, your issuer can provide a global referral network of general
 physicians, dentists, hospitals, and pharmacies. It can also help arrange 
transportation to the nearest appropriate medical facility, and set-up and 
coordinate the transport. You are responsible for all costs associated with
 medical care and transport. In the case of a death, the Benefit
 Administrator can make arrangements for returning the remains of the
 deceased home.

Trip delay: When a covered trip is delayed more than 12 hours due to a covered event,
 expenses incurred as a result of the delay, such as meals and lodging, are 
reimbursed. (Example: Chase Sapphire)

Baggage delay: If your checked bags are delayed for a period of 18 hours or more by a
 common carrier, you will be reimbursed for the emergency purchase of covered
 essential items. (Example: Chase Sapphire)

Roadside dispatch 
referral service: Convenient towing and locksmith services in the U.S.
and Canada are available 24/7. All costs are your responsibility.

Emergency ticket replacement: Helps you with the carrier’s lost ticket reimbursement procedures if you 
should lose your ticket and can arrange delivery of a replacement ticket to 
you. All costs are your responsibility. (Example: Visa Signature)

Common carrier travel insurance coverage: Some cards, like the Citi/AAdvantage and Discover cards, offer up
 to $500,000 in flight accident insurance.

Hotel/motel burglary insurance: This 
reimburses you for personal property stolen from your hotel or motel room.
Your hotel/motel stay must be purchased entirely with an eligible card.
(MasterCard)

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

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