1 Smart Credit Card Tip to Always Follow

1 Smart Credit Card Tip to Always Follow

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Placing travel purchases on a travel credit card is a no-brainer, given the high rewards many cards dish out for airfare and hotels. But many cardholders overlook some other major perks that come with buying travel on credit.

The Motley Fool analysts Nathan Hamilton and Michael Douglass discuss this topic in the video segment below, highlighting one essential credit card tip.

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Michael Douglass: So Nathan, rules of thumb are often kind of problematic, right? Because people say, “Oh, do this always, do that always.” It’s kind of hard to find things that are actually fairly universal. But one thing that’s pretty darn close to a universal is, “Always place your travel airfare on credit.” Why?

Nathan Hamilton: Yeah, and it makes sense beyond just the rewards, because it’s really a no-brainer. You get premium rewards with a travel credit card.

Douglass: Sure.

Hamilton: But what many people overlook are the travel insurances, and that’s more what I want to focus on today. Specifically, if you look at it, one in six flights, according to various research, are going to incur some sort of delay, cancellation — some sort of event that will possibly ruin your trip.

Douglass: Could mess with things.

Hamilton: Yep. So in all likelihood, if you are traveling, you’re going to run into an event where your trip is going to be delayed, canceled, and so forth. And there are two types of insurances that are pretty interesting with travel credit cards .

One is travel delay. So if you’re looking at a card that you place at purchase for the airfare on that card, if your flight is delayed anywhere from 3 hours to 12 plus hours, which is a very short time frame in many cases, you can get coverage for … be it lodging, meals. And that’s for your spouse and children that are with you on that trip. So it’s a very valuable insurance that, if you are not paying fees on that credit card or you’re just placing the travel purchase, you’re going to get that insurance.

Douglass: And then, the second version, of course, is baggage delay.

Hamilton: Yep.

Douglass: Which essentially, like … This has happened to me, right, where I’ve gone on a trip. We were actually skiing in Vermont, and our ski clothes didn’t make it with us. And–

Hamilton: You need those.

Douglass: Yeah. So we kind of had to stay indoors for three days while we waited for them, which was kind of awful for a seven-day vacation.

Hamilton: Yep.

Douglass: You know, baggage delay lets you buy clothes and items that you need for things. It would have probably made my ski trip a little bit more exciting and good that year.

Hamilton: Yeah, and if that delay, with some cards, is as little as three hours–

Douglass: Yeah, which is–

Hamilton: Which is a very, very short time frame. You can get coverage at several hundred dollars, and that would be covering your ski pants or mittens, whatever, that you could’ve used to go skiing that day. But it is very useful.

And here’s the thing. Insurance isn’t sexy. Like, we never think about insurance, but we love it when we have it. And this is something that is offered as a perk with many travel credit cards. And of course, do the research when you’re looking at your travel credit card to see if it is included and what you have to do to file claims, because you’ve got to keep receipts. There’s a lot of work you’ve got to do. But it’s a perk that’s offered that many people overlook.

Douglass: Yeah, and that’s definitely a very clear benefit to these travel credit cards, in addition to usually getting some better travel benefits, as well.

Hamilton: Yep.

Douglass: So you get more back on the dollar that you spend, hopefully, all other things being equal. And you also get these helpful insurances, too. You know, we’ve got, actually, our picks for the best credit cards of 2017 and the best travel credits of 2017 at fool.com/creditcards . Again, that’s fool.com/credit cards, so check us out there.

Thanks, Nathan.

Hamilton : Thank you.

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