Credit Card Travel and Purchase Protection Trends in 2024

At O1ne Mortgage, we prioritize consumer credit and finance education. As we look ahead to 2024, it’s clear that credit card travel and purchase benefits are becoming increasingly important to cardholders. This is partly due to travel delays and rising costs, which make these perks more valuable, but also because cardholders are becoming more informed about the benefits their cards offer. Let’s explore how these perks work and how they might evolve in 2024.

Credit Card Travel Protection Trends in 2024

To be eligible for travel protections, you typically need to book your trip, lodging, or other services with the card that offers these protections or use points from the card’s rewards program. When you do, credit cards’ travel purchase and insurance benefits may include:

• Trip accident insurance: Coverage for when a traveler is killed or seriously injured during a trip, including loss of speech, sight, hearing, or a limb.
• Trip cancellation and interruption insurance: Reimbursement if your trip is canceled or cut short due to a covered event, such as illnesses or severe weather.
• Trip delay insurance: Coverage for expenses like meals, transportation, and lodging if your trip is delayed or canceled.
• Baggage delay insurance: Reimbursement for necessary purchases, such as clothing and toiletries, while you wait for your bags to arrive.
• Roadside dispatch or assistance: Help connecting you with nearby roadside assistance or covering the cost of certain services.
• Auto rental collision damage waiver: Primary or secondary coverage for when a rental car is damaged or stolen.

According to Peter Alter, vice president at CBSI, which provides benefits services to card issuers, “Credit card issuers look at what consumers are spending their money on and try to address those use cases with benefits and other features.”

Travel Insurance Claims Are Rising

Trip delay and trip cancellation and interruption insurance benefits continue to be top benefits as more people travel and experience delays. “The big theme for 2024 is Covid is in the distant past,” says Alter. “All the travel trends and related claims have resumed, and they’re surpassing pre-Covid levels.”

Benefits claims have risen due to airline-caused delays and systemwide issues like long airport security lines. Severe weather events also contribute to delays and cancellations. In 2023, 76.05% of flights arrived on time, while 22.06% were delayed, and 1.62% were canceled, according to the U.S. Bureau of Transportation.

Cardholders Are Increasingly Savvy

Some of the increase in claims can be attributed to people learning more about their credit cards’ benefits. “There is a large and growing number of savvy credit card travelers,” says Alter. “Consumers are increasingly aware of the difference in the coverage details, such as a trip delay coverage that starts at four hours, six hours, or 12 hours, or whether their trip cancellation covers severe weather.”

Reviewing your credit cards’ trip cancellation, delay, and interruption coverage details could save you a lot of money. Knowing which card will be best based on the eligibility requirements and benefit amounts is crucial.

Travel Benefits Might Become Less Common

Increasing claims could lead to card issuers removing some of these benefits, but that likely won’t be the case across the board. “These travel benefits have the highest level of claims and are, therefore, the most expensive to deliver,” says Alter. “I think there will be a differentiated market.” Credit cards that want to attract frequent and aspirational travelers might continue offering these benefits, while others might strip them away.

Rental Agencies Ask for Proof of Insurance

Credit cards’ auto rental collision damage waiver (CDW) benefit can help cover the cost of repairs or a replacement if a car you rent is damaged or stolen. Some cards offer primary coverage, meaning the credit card benefit kicks in first, while secondary coverage requires you to file a claim with your insurance company first.

The big change for 2024 is that rental car agencies are increasingly asking for proof of insurance when you want to rent a car. “Partially because they want to sell the CDW, and partially because they don’t want you to drive a car off a lot without insurance,” says Alter. To make this easier for cardholders, CBSI created a real-time mobile and web-accessed Letter of Eligibility that cardholders can request and show to rental agencies.

You can go to eclaimsline.com, enter your card number, contact information, and rental period, and immediately receive the Letter of Eligibility.

Credit Card Purchase Protection Trends in 2024

Most credit cards include zero-liability protection for unauthorized purchases, and many offer additional protections on products and services you pay for with your credit card:

• Return protection: Allows you to return a product and get a refund when the original retailer doesn’t accept the return.
• Purchase protection (or purchase security): Get reimbursed for products that are damaged, lost, or stolen.
• Extended warranties: Extends the manufacturer’s warranty on a product.
• Price protection: Covers the difference between your purchase price and a lower advertised price after you make a purchase.
• Cellphone protection: Reimburses you if your phone is stolen or damaged.

As helpful as these card benefits can be, it’s important to remember they all have requirements and limits. For example, return and purchase protections usually only last a few months from the purchase date, and there may be per-claim and annual limits. The extended warranty benefit may only apply to purchases when the original manufacturer’s warranty was for one or two years. However, many of these benefits, even cellphone protection, are available on cards that don’t have an annual fee.

Extended Warranties Remain Important

Receiving an extended manufacturer’s warranty was always a nice credit card benefit, but it became increasingly important when supply chain shortages made replacing broken items more difficult. Now, even if companies resolve their supply chain issues, replacement costs may be much higher. “We do see that people are keeping items longer, and we’re getting claims that are closer to the end of the warranty period,” says Alter. “In years past, people might have bought something new, now we’re getting a claim.”

Purchase Protection Benefits May Become More Common

Credit card purchase protection can vary, but they generally last 60 to 120 days from the date of purchase. “Because online shopping is clearly here to stay, I think that’s a benefit that you’ll see continue and possibly grow,” says Alter. Cardholders may even be able to file a claim if someone steals an item they buy from their porch or mailbox. “We also cover things like an item stolen from the car,” says Alter. “That happens frequently, but it’s not covered in the news as much.”

The Big Picture for 2024: A Focus on the Claims Experience

In past years, we highlighted new types of benefits that were introduced, such as rideshare protection and coronavirus-specific travel protection benefits. That’s not the case for 2024. “There aren’t many brand-new benefits for 2024,” says Alter. “But there is a focus on helping cardholders understand and take advantage of their benefits.”

The electronic Letter of Eligibility for renting a vehicle is one example. You can also file other types of claims on eclaimsline.com, and CBSI developed systems and works with the major travel agencies to make the process easier and faster. “We can now collect some or all of the documentation on behalf of claimants,” Alter says. “We’ve seen our claims cycle times drop, and the approval rate has increased, so we know those efforts are working.”

Find Your Next Credit Card

Want to find a great credit card that offers all sorts of benefits? Experian can show you credit cards matched to your unique credit profile. Review the results and compare the cards’ fees, features, and benefits to see which one might be the best fit.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. Our team is here to help you navigate the complexities of mortgages and find the best solutions for your financial needs.