Note: the following is not intended as financial advice. Rather, it’s one reader’s experience, designed to give you food for thought!
You wouldn’t dream of purchasing a new washing machine without first shopping round to find the best deal, so why is it so many people stick with a credit card that isn’t giving them what they currently need – or providing them the perks they could be enjoying? This is something my husband and I recently asked ourselves when searching for travel insurance.
Alan and I are frequent, independent, overseas travellers. Being very careful readers of travel insurance policies, we had, for many years, been satisfied with the free travel insurance offered as part and parcel of our credit card. Then, we both developed what’s known, in the world of insurance, as ‘pre-existing medical conditions.’ My husband was diagnosed with stroke, while I was diagnosed with osteoporosis. Suddenly our free credit card travel insurance was no longer available because the insurer didn’t cover pre-existing medical conditions – even if we were happy to pay a special premium for the service.
The alternative was to purchase travel insurance from an independent provider covering pre-existing medical conditions, but it came with a hefty $3,000 price tag. In talking about this with others, we discovered our neighbours (who are also travellers) have a credit card offering free travel insurance, and, for a premium, provides cover for pre-existing medical conditions. In our case, the premium would be $1000, while the cost of the new credit card would be $50 a year more than our previous one. Swapping to the new credit card was therefore a no-brainer, as we were instantly saving $1950. However, this discovery was just the beginning of our credit card journey!
The more we looked into different credit cards, and the range of benefits and perks each offered, the more we realised it paid to shop around. For instance, we’ve always opted for a credit card which rewards us with cashback (a cash payment into our credit card account based on our level of spending). As we’ve grown older and prefer not to drive long distances, we’re now more interested in a credit card that provides us with air mileage points (which means we can ‘save up’ to fly, free, to visit our adult children who live 7 hour’s drive away). Speaking of driving, we have a friend whose credit card provides her with car rental excess cover of $3000. This means, when she and her partner are using a hire-car overseas, they don’t have to pay for the hire car’s excess cover (which can be in the range of $40-50 a day).
It turns out our son, who recently purchased a new mobile phone and promptly dropped it onto the footpath, breaking its screen, was covered for the cost of repair, because he’d paid for the phone with his credit card. His wife was able to claim credit card insurance on a pair of prescription glasses that succumbed to a similar fate, and they both enjoy the occasional airport lounge pass as a reward for spending on their credit card.
There are many more perks we’re still discovering, but switching credit cards in order to obtain them, does come with a warning: it takes time to apply for a credit card from a new provider, and it takes time to switch direct payments from your previous credit card to your new one. But if you’re someone who has the time, and who enjoys a challenge, the benefits can definitely be worth it.
If your current credit card isn’t giving you the kinds of benefits you could get from another provider, do your own research thoroughly before deciding to make the switch. If you do opt for a new credit card provider, enjoy your perks!
