Credit cards better than debit cards – sometimes

Credit cards have been an easy target for Congressional grandstanding and regulations but beneath the widely-criticized rates and fees lie many good benefits that are usually hidden in the fine print. Credit cards can provide valuable purchase protections and insurance that are unmatched by cash and debit cards.

Yet, more consumers are forgoing these benefits and choosing debit cards instead of credit cards for payments. Total payment volume for debit cards
surpassed credit-card volume for the first time in 2009 and will continue to expand.

Consumers should understand their payment options before cutting up the credit card. There are times when using a credit card is your best choice for payment, especially for tickets and large purchases. However, insurance and purchase protections vary by card and issuer, so it is a good idea to research these when comparing credit cards.

Here are some of the extra benefits offered by many credit cards:

1. Car Rental Loss/Damage Insurance

With a number of issuers, using your credit card can cover damage incurred when renting a car, so you may not have to pay for the extra insurance coverage that car rental companies try to sell. To be safe, be sure to check the description of this coverage in your cardmember agreement. You must be the primary renter and use your card for the rental. To be covered by the car rental loss/damage insurance, you must decline the collision damage waiver (CDW) or similar option when you are reserving and picking up your rental car. Coverage applies for the first 30 days, and is in excess of your other sources of insurance. Coverage may not be available in some countries.

Typical exclusions include: items stolen from inside or outside the vehicle; person not designated in the rental agreement/contract as an authorized driver; loss that occurs while driving under the influence of drugs or alcohol; racing or reckless driving; blowout or tire/rim damage that is not caused by theft or vandalism or is not a result of a vehicle collision causing tire or rim damage.

2. Price Protection

Price protection helps a consumer get the best price you can find on the products you buy. Many issuers will refund the price difference if you find a lower price on the same item from the same manufacturer within a designated time period (typically 60 days). Issuers will set a refund limit. For example, Citi refunds the price difference up to $250 per item.

Standard exceptions include: internet purchases or advertisements; items subject to rebate or manufacturer's coupon or a refund; items sold at "going out of business sales or "close out" advertisements; and customized items. Price protection does not cover airline and transportation tickets, travelers checks, cash or its equivalent.

To get the price protection, save the printed advertisement and contact the program administrator for claim forms and filing procedures.

3. Purchase Protection

Purchase protection protects eligible purchases against accidental damage or theft for up to 90 days from the date of purchase. It can repair, replace or reimburse for up to the amount charged. For example, American Express coverage is limited to up to $1,000 per occurrence, and up to $50,000 per cardmember account per policy year. It is in excess of other sources of indemnity.

If a retailer will not accept a return within the first 90 days of purchase, some cards, like Chase Sapphire, will reimburse you for the cost of the item purchased on your card.

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