Credit cards have become an easy target for Congressional reform and regulations, but beneath the widely criticized rates and fees lie many benefits -- usually hidden in the fine print. Credit cards can provide valuable purchase protections and insurance unmatched by cash and debit cards.
Yet more consumers are forgoing these benefits and choosing debit cards instead of credit cards for payments. Total payment volume for debit cards surpassed credit card volume for the first time last year and will continue to expand this year, according to a report from Javelin Strategy & Research. Fifty-six percent of consumers said they had used a credit card in the past month, down from 87% in 2007. The study predicts that figure will drop to 45% by 2020. Many consumers are switching to debit cards, but there are times when using a credit card is your best choice for payment, especially for tickets and large purchases. Insurance and purchase protections vary by card and issuer, though, so it is a good idea to research these when comparing credit cards.
Here are some of the benefits offered by many credit cards:
CAR RENTAL LOSS/DAMAGE INSURANCE
Many credit cards cover damage incurred when renting a car, so you may not have to pay for the extra insurance coverage rental companies sell. To be safe, 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 or similar option when 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; people not designated in the rental agreement or contract as an authorized driver; a loss that occurs while driving under the influence of drugs or alcohol; racing or reckless driving; a blowout or tire and rim damage not caused by theft or vandalism, or that is not a result of a vehicle collision.