Having a credit card in your wallet can provide you with more than just access to credit – it can offer all kinds of extras. In order to attract and retain customers, credit card providers offer a variety of extras, such as rewards programs, personal concierge services, dining and entertainment extras, and various types of insurance.
So, what do these insurances actually offer? And are they worthwhile?
Travel insurance is one of the most common types of credit card insurance. Rewards credit cards, Gold and Platinum credit cards often offer ‘complimentary’ travel insurances.
This type of insurance usually works in much the same way as traditional travel insurance, covering medical expenses, travel cancellation, lost luggage, travel documents, personal liability and more.
The amount of cover on offer will vary according to the credit card provider, so check the small print before you travel. You will usually have to use your credit card to purchase travel or accommodation costs to be covered, and you may only have cover for a certain number of days per year.
This offers cover on interstate flights within Australia, so if you have to cancel or amend an interstate flight due to serious illness, or if your luggage is lost or delayed, this insurance could cover that.
If you use your credit card to purchase your travel, this insurance offers cover if you or members of your family die or are seriously injured in an accident while travelling.
This will cover the loss or damage of your personal items up to a certain dollar amount if your hotel or motel room is burgled while you are travelling (usually within Australia).
This cover can be included within a general credit card travel insurance policy, or it can be a standalone cover. If you are in an accident in a rental car (paid for by your credit card), this insurance will reduce the excess you have to pay.
Another common type of credit card insurance is purchase-related insurance.
If you buy an item within Australia with your credit card, and then find the item advertised elsewhere at a lower price, this insurance will reimburse you the difference. Price protection, which is also known under names like ”guaranteed pricing scheme” and “price guarantee protection”, is designed to help you get the best price on products no matter when you buy them.
This insurance can cover you if you buy a new item with your credit card and the item is stolen or accidentally damaged within 90 days.
If you use your credit card to purchase a new electrical appliance within Australia, this insurance offers an automatic 12 month extension on the item’s original Australian manufacturer’s warranty. On things like televisions, music players and even computers (if the manufacturer’s warranty is less than five years).
While purchasing an extended warranty, which so many sales representatives recommend when you buy electronics, could cost you around $100 more, this feature means it is free if you pay with your credit card.
We have not come across any credit cards in Australia that offer health insurance. As there are so many different types of health insurance, it’s important to choose the policy that specifically meets your needs.
While you can’t get credit card health insurance, you can still find health insurance that saves you money. One way to save money is to compare all your options and choose a policy that only covers what you need.
Another way to save money is to choose a ‘Not for Profit’ health insurance provider, such as GMHBA. With no shareholders to worry about, this type of health insurance provider reinvests any surplus revenue to minimise premium increases and deliver new health and wellness programs.
Again, life insurance is not offered on any credit cards that we know about. However, you may find that your super fund or your employer already have a life insurance policy for you. Check to find out if you’re covered, and how much cover you have.
With credit card insurances, the most important thing to remember is to check the terms and conditions. Don’t rely on any type of insurance until you have read the small print and you know you are covered.
Founder of Creditcard.com.au. Roland has extensive knowledge about credit cards in Australia. Known as a credit card expert, he has been featured on tv and in various publications. Some popular offers on our site right now include the ANZ Low Rate. This special offer has no annual fee first year, a low purchase rate and long 0% balance transfer. Have a look also at the huge 0% for 30 months balance transfer from Citi with no balance transfer fees.
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