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May 25, 2011

  • Reconsidering Credit Card Use, Pt.1
       Don't fly without it!

    Americans had a big scare during the 2007 recession and have not completely recovered from the credit card crisis. High interest rates and excessive fees left a sour taste in the mouths of consumers motivating many of them to cut up the plastic and pay down card debt. Popular opinion has dramatically turned against credit card use in favor of cash and debit card. Recent statistics indicate that for the first time in the history of the credit and debit card, over the past year and a half, Americans choose debit over credit more than 50 percent of the time. Experts do not believe that the trend will end any time soon. However, they do say that if you are good at managing a budget, you might want to consider the benefits of paying by credit card.

    There are a number of reasons why it makes sense to purchase travel tickets using a credit card. To begin with there are some cards on the market that automatically protect your purchase in case of an emergency cancellation or postponement. Typically, this perk requires that you pay for 100 percent of the charges for the airline ticket or other travel with your card in order to reap the benefit. There are limitations as to the amount of protection but most credit cards have a limit of $1,500 or the original cost of the ticket. In other words, if the cost of the fair increased, you would be responsible for the difference. Airlines will often issue a voucher for use with your next purchase. If another insurance policy covers the same incident, airlines will typically only cover the difference. When checking with your card issuer on the details of this benefit be sure to ask if there is any fee.

    It's no secret that losing one's luggage during airline travel is becoming more and more common. An increasing number of credit card companies offer lost luggage coverage if you purchase your airline ticket with your card. This coverage protects you and your dependents for permanent loss and is secondary to the airline policy. Lost luggage coverage ranges between $250 and $3,000.  Read part two to get peace of mind knowing you won't get stuck on the side of the road or with a hefty damage bill if you rent a motor vehicle.

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