Credit Card Debt Management

Most of us know all about credit card rewards, introductory APR deals, and all the other obvious, highly-touted reasons to own a credit card. However, how many of us know about one of the most valuable “hidden” credit card perks?

Rental car companies always try to sell you collision insurance to set your mind at ease during the time you’re driving their property. With a look of well-practiced grave concern, the employee assisting you will ask whether you’ll be buying the insurance, which can run up to an additional $30 per day. Smart credit card holders will decline. A little research will likely show that your credit card, when used to pay for your entire car rental, provides all the protection you need.

The bottom line is, it’s good to have a general auto insurance policy that will cover any personal liability and/or personal injury. However, the supplemental insurance from credit card companies can prove quite valuable in the event of an unfortunate accident.

According to Two Pennies Earned blog, the following is a brief summary of each credit card company’s rental collision insurance terms:

DISCOVER TRAVEL PROTECTION

-$25,000 worth of coverage for damage to rental car only.

-Car cannot be rented for more than 31 consecutive days.

-Entire rental must be paid for with credit card.

-Rental company’s insurance offer must be declined.

-Legal renter of the car must be the driver at time of accident.

-Driver must not be intoxicated in any way at time of accident.

-Deductible from primary insurance company is covered.

MasterCard MasterRental

-Car cannot be rented for more than 15 consecutive days.

-Rental vehicle must have MSRP of less than $50,000.

-Rental vehicle must not be a truck, pickup, sport utility truck, full size van on a truck chassis, camper, antique, offroad vehicle, or other recreational vehicle.

-Covers theft, collision damage, post-collision towing.

-Will act as primary insurance if renter is otherwise uninsured.

-Deductible from primary insurance company is covered.

-Rental company’s insurance offer must be declined.

-Credit card must be used to pay for entire rental.

VISA

-Car rental cannot exceed 15 consecutive days in country of primary residence, or 31 consecutive days in foreign country.

-Covers physical damage, theft, post-collision towing to nearest mechanic.

-Covers up to value of original MSRP

-Does not cover exotic or antique vehicles (20 years or older or retired for more than 10 years).

-Does not cover: expensive luxury vehicles; certain vans; vehicles that have an open cargo bed; trucks; motorcycles, mopeds, and motorbikes; limousines; and recreational vehicles.

-Entire rental must be paid for with credit card.

-Rental company’s insurance offer must be declined.

-Accident must be reported immediately.

As for American Express, their terms vary based on what type of card the cardholder owns. The options may be further explored here. It is wise to check the rental vehicle before leaving the lot to identify and point out any pre-existing bodily damage. That way, you won’t be held accountable later for something you didn’t do. It is also smart to check your own credit card company’s terms and conditions yourself before renting a car, to see if anything has changed. Most credit cards offer a wide variety of other travel perks, from roadside assistance to emergency check-in and even international cell phone rental. This is yet another area where it pays to read the fine print.