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Credit card benefits are changing: What's going on?

March 03, 2020
8 min read
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I've been using credit cards for more than 30 years and I've been covering the credit card industry as a journalist since 2008. Until two years ago, credit card benefits were all but chiseled in stone. Nearly every card offered rental car collision damage waiver (CDW) coverage, and the vast majority of premium travel credit cards came with perks like extended warranty coverage, price protection and travel accident insurance. Changes to these benefits were extremely rare and usually involved a card issuer offering additional perks, not removing them.

But starting in 2018, these key benefits and others began disappearing from the cards of some major issuers, even from some premium travel rewards cards that were known for their generous benefits.

What's changed

The first indication that the ground was shifting came from Discover, which dropped five major benefits from all its cards in February 2018. These benefits included extended product warranty, return guarantee, purchase protection, auto rental insurance and flight accident insurance. These were all benefits that I had considered to be standard on most credit cards. Discover's statement blamed "prolonged low usage" as its reason for discontinuing these benefits.

Because the Discover it cards are all no-annual-fee cards, I figured it was an anomaly that wouldn't spread to premium reward cards. I was wrong.

In June 2018, Chase announced the removal of several key benefits from some of its most popular cards. Price protection was removed from all Chase cards and return protection was discontinued from the Chase Sapphire Preferred Card, Chase Freedom (No longer open to new applicants) and Chase Freedom Unlimited cards, among others. Further, it was announced that Freedom cardholders would no longer receive lost luggage reimbursement and travel accident insurance.

But the big shocker came in June 2019, when Citi announced the removal of nearly all cardholder benefits from most of their cards. The disappearing benefits included:

  • Worldwide car rental insurance
  • Trip cancellation and interruption protection
  • Worldwide travel accident insurance
  • Trip delay protection
  • Baggage delay protection
  • Lost baggage protection
  • Citi Price Rewind
  • 90-day return protection
  • Roadside assistance dispatch service
  • Travel and emergency assistance

Even the ultra-premium Citi Prestige® Card lost medical evacuation and missed-event ticket protection. Damage and theft protection remained in place on many cards, however, and the Costco Anywhere Visa® Card by Citi retained worldwide car rental insurance.

Within a few months of Citi's announcement, Barclays notified cardholders that extended warranty, price protection, purchase assurance and trip delay benefits were being removed from many popular travel rewards cards, including the AAdvantage® Aviator® Red World Elite Mastercard, AAdvantage® Aviator® Silver World Elite Mastercard and the JetBlue Plus Card.

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Whats going on?

To understand why all these changes are occurring, I talked to Peter Alter, vice president at cbsi, the leading provider in the U.S. of protection and assistance benefits for credit cards. Although they don't have a large public profile, cbsi works with card issuers to provide benefits that protect consumers from financial loss when something goes wrong with travel or retail purchases made with a covered account. It also provides valuable benefits for travelers such as airport lounge access and medical assistance. In fact, cbsi delivers benefits to more than 1,500 financial institutions, covering more than 400 million transaction accounts such as credit cards, and has been doing so for over 30 years.

When I asked about the underlying reasons that credit card benefits are changing, Alter cited rising numbers of cardholder claims for these benefits. He attributes it to several factors such as a good economy and increasing international travel. (International travel generates higher claims than domestic travel.) He also noted that rental car agencies are much stricter about damage and are even using new technology to detect, identify and ultimately bill customers for damage that might have previously gone unnoticed. Those damage claims get passed on to the card issuer's benefit providers, increasing the cost of offering these coverages.

Rental car agencies, like Hertz, are getting much stricter about damage and sometimes bill customers for unnoticed damage after the fact. (Photo by ablokhin/Getty Images)

Furthermore, car ownership is decreasing as a new generation of Americans living in cities have neither cars nor personal auto insurance policies to cover rental car damage before the secondary policies offered by most credit card issuers apply.

But Alter also point outed out that there are some areas where credit card benefits are improving, such as cellphone insurance. At a time when many people carry a phone that costs $600 or more, there are several credit cards that come with a cellphone protection plan including:

The information for the Citi Prestige, Uber Visa, Wells Fargo Propel card as been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

He cites screen damage as the number one reason for claims, and said that the costs of these claims are going up as the next generation of expensive, OLED screens becomes common. Credit card issuers offer these benefits because they know that cardholders who receive valuable protection benefits in return for using their card will tend to use it more often. The card issuer will then make more money on merchant fees.

Phone screen damage is one of the main sources of insurance claims for credit cards these days. (Photo by Justin Sullivan/Getty Images)

Finally, Alter makes the case that rental car benefits are extremely valuable and are worth far more than the potential rewards from charging the cost of a rental agency's CDW insurance on a card. For example, he says that the average cost of the optional insurance sold by rental car companies is $22 per day. So when you use a credit card that offers this coverage and decline the optional insurance, the $22 saved per day will vastly exceed the value of the rewards you might earn. Even an expensive rental car that costs $100 per day earns just 300 points on your Sapphire Reserve, worth just $6 according to TPG's latest valuation of Ultimate Rewards at 2 cents per point. So it still makes sense to hold a credit card with benefits for renting a car or making other purchases.

What does the future of credit card benefits look like?

Alter sees credit card issuers continuing to focus on the customer experience. He believes that in 2020 card issuers will strive to give their customers a very clear understanding of what's covered while making it more convenient to use these benefits. For example, he says that cbsi now has access to airline data that it once required customers to provide. You may no longer have to submit proof of a delayed or cancelled flight -- the benefits administrator might be able to get that information directly from the airlines.

Bottom line

Before you rely on credit card benefits such as auto rental insurance, price protection or damage and theft coverage, you need to double-check that these benefits are still being offered by your credit card issuer. And when selecting a new credit card, you need to pay closer attention to your benefits than ever before. You can no longer assume that every premium credit card offers a minimum slate of benefits. It's up to you to find the card that offers the travel insurance and purchases protection coverages that you need.

Featured image by (Photo by Isabelle Raphael / The Points Guy)
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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TPG featured card

Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

2 - 10X points
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Intro offer

75,000 bonus miles
Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

Annual Fee

$395

Recommended Credit

740-850
Excellent
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023
Best card for premium perks while traveling
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

10XEarn unlimited 10X miles on hotels and rental cars booked through Capital One Travel
5X5X miles on flights booked through Capital One Travel.
2X2 Miles per dollar on every purchase, every day
  • Intro Offer
    Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel

    75,000 bonus miles
  • Annual Fee

    $395
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    740-850
    Excellent

Why We Chose It

The Capital One Venture X card is one of the best all-round travel credit cards ever launched. Not only is it offering a tremendous welcome bonus, but cardholders can earn tons of miles on everyday spending and receive a 10,000-mile anniversary bonus to boot. Its annual fee is $395, but cardholders can count on up to $300 in statement credits toward travel booked through Capital One Travel each year and other valuable benefits like access to Priority Pass lounges and Capital One’s own growing family of airport lounges.

Pros

  • Excellent welcome offer worth 75,000 miles after you spend $4,000 on purchases in the first three months.
  • Up to $300 in annual travel statement credits toward bookings make through Capital One Travel.
  • 10,000 bonus miles (worth $100 toward travel) each account anniversary.

Cons

  • The $395 annual fee might be expensive for some, but this card’s benefits provide much more value than that.
  • If you don’t travel frequently, this might not be the best card for you.
  • Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel
  • Receive up to $300 back annually as statement credits for bookings through Capital One Travel, where you'll get Capital One's best prices on thousands of options
  • Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
  • Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
  • Earn unlimited 2X miles on all other purchases
  • Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
  • Receive up to a $100 credit for Global Entry or TSA PreCheck®
  • Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
  • Named editors' choice for "Best New Credit Card of 2021" by The Points Guy
  • Earn 10 miles per dollar when you book on Turo, the world's largest car sharing marketplace, through May 16, 2023