Credit Card Rewards That Aren’t as Valuable as You Think

Credit card rewards and benefits can provide a lot of value in your everyday use, but some features may sound better than they actually are. Understanding what you’re actually getting with your credit card is crucial to avoiding potentially costly situations.

Here are some relatively common rewards offers and benefits that may not be worth the trouble.

Is Rental Car Insurance a Good Credit Card Reward?

Also called auto rental collision damage waiver, this protection comes standard on many credit cards. In the event that you get in an accident with your rental car, this feature may cover up to the full cost to repair or replace the vehicle.

Why it sounds good: Rental car insurance can cost between $10 and $30 per day. In some cases, it can even cost more than the rental itself. With coverage on your credit card, you can opt to skip the cost of buying it directly from the car rental provider.

Why it isn’t as valuable as you think: There are a few reasons why credit card rental car insurance might not be worth using every time you travel.

For starters, most credit cards offer secondary rental car insurance. This means that if you have a personal auto insurance policy, you’ll typically need to file a claim with that insurance carrier first, and your card’s coverage will kick in if there’s anything left over — in many cases, it may just cover your deductible.

“Unless you’ve got extreme damage to your car and your personal policy doesn’t pick up the costs, the secondary coverage is more or less useless,” says Alex Miller, founder and CEO of, a travel rewards website.

There are cards that offer primary coverage, and if you don’t have a personal car insurance policy, secondary coverage gets bumped up to primary coverage.

Second, credit card rental car insurance doesn’t include liability coverage, which is arguably more important than collision coverage. If you cause an accident and injure someone or damage that person’s property, you may be on the hook for everything. So even if you use your card’s coverage, still consider buying liability insurance.

Finally, credit card rental car insurance comes with a lot of limitations. For example, you may be limited to certain vehicles, and rentals in some countries may be excluded from coverage entirely. Be sure to read the fine print of your benefits guide to understand what you’re getting.

[Read: Best Travel Rewards Credit Cards.]

Are One-Time Discounts Good Credit Card Rewards

Retail credit cards often offer one-time discounts — either in the form of a percentage or a flat dollar amount — to incentivize shoppers to apply.

Why it sounds good: Everyone likes a good deal, and getting a discount with your favorite retailer sounds like a win. It can also help you save some money if you’re doing some back-to-school or holiday shopping.

Why it isn’t as valuable as you think: Store credit card discounts can save you money, but they typically won’t offer a big enough discount to compete with the sign-up bonuses offered with traditional rewards credit cards. Among top cash back credit cards with no annual fee, you can get up to a $200 bonus.

Also, most of these discounts are valid only if you get approved for the card. While retail credit cards do tend to have less stringent credit standards than many traditional rewards credit cards, there’s no guarantee of approval.

If you do get approved, you may end up with a low credit limit and a high interest rate, both of which are common features among store credit cards. “They often provide fewer benefits and rewards (compared with a traditional rewards card),” says Ben Walker, a credit card expert with FinanceBuzz, “and they might only work at the specific retailer where they were opened.”

If you’re thinking about getting a retail credit card, do it because you shop at a particular store regularly, not because of the upfront discount.

[Read: Best Store Credit Cards.]

Are Bonus Rewards on Proprietary Travel Bookings Good Credit Card Rewards?

Some credit card issuers, such as American Express, Capital One and Chase, have their own travel booking platforms that you can use to reserve a trip using cash, points or both. With some credit cards, you may even get bonus rewards if you book your flight, hotel or other travel through the card issuer’s travel portal.

Why it sounds good: Getting bonus rewards on big expenses like a flight or hotel stay could net you far more points or miles than you’d get booking directly with the travel providers. In some cases, you could earn up to 10 points per dollar.

Why it isn’t as valuable as you think: Getting those extra points or miles is nice, but there are strings attached. First, the prices you’ll find may not necessarily be the best prices that are available. Make sure you shop around and compare flight, hotel, rental car, cruise and other travel options to ensure that you’re getting the best deal. Paying more just to get bonus rewards generally isn’t worth it.

Second, these travel platforms function similarly to online travel agencies like Expedia and Priceline, which can add more complications. “It’s often more difficult to navigate the refund process if you have to cancel for any reason,” says Walker. “Working directly with hotels and airlines is typically easier.”

That doesn’t mean you should never take advantage of earning bonus rewards on such travel bookings. But think carefully about the potential pitfalls if your plans change before you pull the trigger.

Is Promotional Financing a Good Credit Card Reward

Many retail credit cards offer promotional financing. This benefit is typically reserved for larger transactions, and you may be able to pay off your purchase over six, 12, 18 or even 24 months interest-free.

Why it sounds good: Getting interest-free payments on your store credit card may sound like a perfect alternative to applying for a loan or 0% annual percentage rate credit card. If you pay the bill in full before the promotional period ends, you won’t be charged a dime in interest.

Why it isn’t as valuable as you think: If you have a balance left over at the end of your promotional period on a traditional 0% APR credit card, you’ll only be assessed interest on the remaining balance.

But with promotional financing on most retail credit cards, it’s deferred interest, so if you don’t pay in full by the end of the promotion, you’ll be charged interest retroactively based on the original loan amount. So consider this option only if you are certain you’ll pay off the purchase well before the promotion expires.

[Read: Best 0% APR Credit Cards.]

Are Food Delivery Service Memberships Good Credit Card Rewards?

Credit card issuers are increasingly offering complimentary memberships to services like DoorDash, Uber Eats, Instacart and more. These subscriptions typically offer free delivery and discounted service fees, as long as you meet minimum order requirements.

Why it sounds good: During the coronavirus pandemic, business has been booming for food and grocery delivery services because people are spending more time at home. Being able to have the convenience of delivery can save you time, and with no charge to you for the membership, you can save a little money, too.

Why it isn’t as valuable as you think: Food and grocery delivery services make money in various ways, including commissions from restaurants and retailers. In turn, restaurants and retailers often charge higher prices to make up for what they’re paying to be on the platform.

What’s more, while you aren’t paying a delivery fee and the service charge is often discounted, you still have to pay a tip for the driver. “It’s often much cheaper to go to the restaurant itself and save yourself the delivery fee,” says Miller.

Are Airline Fee Credits Good Credit Card Rewards?

Some travel credit cards offer airline fee credits, which are statement credits that kick in when you use your card to pay for certain incidental charges. Examples include checked bags, lounge access, in-flight food and drinks and more.

Why it sounds good: Flying can be expensive, even after you pay for your seat. Having a card that covers some of your incidental airline charges can save you hundreds of dollars every year.

Why it isn’t as valuable as you think: Depending on the card you have, you may be limited in how you can use the credit. For example, American Express requires you to pick one airline each year, and you can only get the statement credit on eligible purchases with that airline.

“Airline fee credits are also known to have loads of restrictions, including not being able to use them directly for flights,” says Walker.

If you have a travel credit card that offers free checked bags or lounge access and you rarely buy food or drinks on board, you may never have the chance to maximize your airline fee credit benefit.

Understand the Fine Print to Maximize Your Card Benefits

It’s important to shop around and compare credit card rewards and perks before you apply for one. But go beyond the marketing bullets to read the terms and conditions for the credit card. This fine print is where you’ll find the information you need to make a better decision about which card to get.

While one may seem like it offers more value, restrictions and limitations can dampen the appeal considerably.

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