Credit card 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 getting with your credit card is crucial to avoiding potentially costly situations.
Here are some popular perks that may not be worth the trouble.
[Read: Best Credit Cards.]
1. Rental Car Insurance
In the event that you get in an accident with your rental car, this perk may cover up to the full cost of repairs or an entirely new vehicle.
Why it sounds good:Rental car insurance can cost between $10 and $30 per day. In some cases, it can cost more than the rental itself. With credit card coverage, you can opt to skip the cost of buying it directly from the rental car provider.
Why it isn’t worth the hype: Most credit cards offer secondary rental car insurance, so you’ll typically need to file a claim through your auto insurance first. Then your card’s coverage will kick in if there’s anything left over — in many cases, it may just cover your deductible.
“Secondary car rental insurance typically adds hassle by requiring a primary claim,” says Alex Miller, founder and CEO of UpgradedPoints.com.
Additionally, credit card rental car insurance doesn’t include liability coverage. If you cause an accident and injure someone or damage their property, you may be on the hook for everything. So even though your card touts rental car insurance, you’re stuck with the cost of liability insurance.
Finally, credit card rental car insurance may come with limitations on covered vehicles or exclusions from rental coverage in some countries.
2. Airport Lounge Access
Access to airport lounges is one of the most popular benefits offered by a slew of travel credit cards for people who want a more enjoyable and exclusive travel experience.
Why it sounds good: With access to airport lounges, you can avoid the crowds, indulge in free food and drinks, and enjoy free high-speed internet in a separate environment from the hustle and bustle of the terminal while you wait for your flight — all for free thanks to your credit card.
Why it isn’t worth the hype: The lines to get in at many airport lounges can be incredibly long, and you’ll likely encounter more lines to get food and drinks once you’re inside. Some lounges also restrict the time you can stay, such as only three hours before your flight. So, if you have a long layover, chances are you’ll have to pay airport prices for food and be surrounded by crowds.
Also, access to some lounges may include strict requirements. For example, a credit card may give you access to Delta Sky Clubs, but only if you’re flying Delta.
Your location can also determine the value of this benefit. If your local airport doesn’t have a lounge that your card gives you access to, this benefit ends up being useless.
[Read: Best Travel Rewards Credit Cards.]
3. Zero Fraud Liability
This is another benefit you’ll see touted by nearly every credit card on the market. With zero fraud liability protection, you’re off the hook for any fraudulent charge made on your card.
Why it sounds good: Data breaches and phishing attacks can happen to anybody, so the prospect of having full protection against credit card fraud can provide peace of mind — especially if you are a big online shopper. In 2023, online shopping was the second-most-reported type of fraud, according to the Federal Trade Commission.
Why it isn’t worth the hype: Under federal law, your liability for unauthorized credit card charges is already minimal, thanks to the Fair Credit Billing Act. Your maximum liability for an unauthorized credit card charge is $50 under the act. All you need to do is contact your creditor within 60 days of the statement date to report the fraudulent charge. But you won’t be held liable if you report your card as stolen before any fraudulent charges are made.
Also, fraud protection is offered by almost every card. “Many cards tout a zero fraud liability, but every payment network — Visa, Mastercard, Discover and American Express — has offered that for decades,” says credit card expert and writer Jason Steele.
[Read: Best Store Credit Cards.]
4. Dining and Statement Credits
With this credit card benefit, you get a certain amount of money in the form of a statement credit to spend with a specific retailer. For example, some cards offer a $7 Dunkin’ monthly credit or a $10 Uber Cash monthly credit.
Why it sounds good: The way these benefits are promoted, it’s easy to see why a credit card annual fee could be easily offset by taking advantage of these perks — and that’s not including all the rewards you’ll earn on purchases made with the card.
Why it isn’t worth the hype: These perks usually come with a few limitations — and if the benefits don’t align with your spending habits, they can be worthless.
For example, some credits can be too low to cover a regular purchase, such as the $7 monthly Dunkin’ credit. Depending on location, it could cover the cost of a medium latte and a classic doughnut, but that’s about it.
And if you don’t use your credits in time, you’ll lose them, as most don’t roll over.
Finally, if there are no stores or restaurants available in your area, the perk may be essentially useless. The Resy statement credits offered by some cards are a good example. If you live in a big city, you may not have a problem finding restaurant options. But if you live in a rural area, you’ll find just a handful of options to choose from — or none at all.
“None of these benefits are necessarily useless, but they are just a bit harder to use and don’t necessarily apply to everyone,” says Scott Mayerowitz, travel expert and founder of GlobeTrotScott Strategies.
How to Choose the Right Credit Card Benefits
Determining the value of each benefit is a very personal equation, says Mayerowitz. For example, when considering if a potential card’s travel perks will be worth it, he suggests looking back on your past two years of travel and seeing whether the benefits might have enhanced your trips or gone unused.
“Decide if you could actually use the benefit,” says Steele.
If you travel a lot, credits towards lounge access and other travel perks may be worth it. “But it may not be for someone who travels once or twice per year,” says Sarah Cash, points advisor at Points.me.
“I view all perks under two buckets, those that you will immediately put to use based on your current spending and lifestyle, and those that you will have to make some changes to take advantage of,” says Tim Qin, co-founder and CEO at Roame.Travel.
When it comes to choosing a new credit card, Cash recommends looking past these flashy benefits and focusing on the amount of points or cash back that the card earns in the categories you spend in.
“That’s not a stereotypical benefit, like lounge access, but if you can earn two points per dollar on all your purchases, for example, your points will multiply a lot more quickly,” says Cash.
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4 Credit Card Perks That Aren’t Worth the Hype originally appeared on usnews.com
Update 10/30/24: This story was previously published at an earlier date and has been updated with new information.
