Know How Credit Card Transactions Work And Take A No Foreign Transaction Fee Credit Card With You

Car Rental Coverage – Key Choices Before They Hand you the Keys

There are various types of insurance coverage when you rent a car abroad. “Collision damage waivers” (CDW) are easily purchased through a car rental agency, but can often be expensive. You could also opt to get collision insurance as part of a comprehensive travel insurance policy. The best affordable option however, is to use the free or low-cost coverage provided by your credit card company. These coverage plans are divided into “primary” and “secondary” coverage.

Nearly all credit card companies offer secondary coverage, which acts as a supplement to your own personal auto insurance. But keep in mind that most personal car insurance plans don’t cover international driving, and even if they did, would you want to risk increased chances of an accident in a land with different road rules, speed limits, and even driving lanes? No one wants higher premiums! If you are considering renting a car in another country, look into paying with a card that offers primary coverage, so that way you’ll be protected from higher premiums should bad luck strike along the way. Be sure you understand how credit card transactions work as relate to insuring your rental.

If you use American Express cards, you might want to look into the company’s Premium Car Rental Protection Program, which charges a flat rate of $24.95 per vehicle rental for up to 42 consecutive days. Enrollment is free and there is no deductible, with up to $100,000 in primary theft and damage covered (liability not included). Generally, American Express does not offer many cards with no foreign transaction fees. Two exceptions have traditionally been the high-end American Express Platinum and Centurion card, but these top-shelf products are out of reach for many people. Fortunately, as of May 2014, users of consumer and business Delta SkyMiles credit cards can also now access a waiver of foreign transaction fees. The road ahead is looking clear!

Behind the Wheel for Business and Pleasure

Other credit cards that incur no foreign transaction fees and offer primary auto insurance include the Citi Thank You Premier Card, the United MileagePlus Explorer, the Fairmont Visa Signature card, and the Discover Escape Card. And if you’re traveling abroad on business, you might want to consider the Chase Ink Plus or Chase Ink Bold cards, which both offer primary insurance coverage if the car rental is used for business purposes. The Chase Ink Plus was also named by Money Magazine in October 2013 as the best credit card for Travel Rewards for Small Business, so if you’re the type of person who logs lots of miles in your business dealings, think about chasing down this deal. Another option is the Mariott Rewards Premier Business card, whose plan offers reimbursement for theft and collision damage up to the actual cash value of the car. All three cards are offered through Chase.

If you wonder how credit card transactions work as relates to rental cards just be careful. Don’t take your auto rental insurance coverage lightly. Do a thorough review of your choices, and talk to your bank or credit card company to make the decision that is right for you. For some additional tips, check out the sidebar below.

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How Credit Card Transactions Work: Foreign Car Rentals and Credit Card Insurance – Some Tips

• Talk to your credit card company and get specific information on countries where the insurance will and will not apply, and other details such as rental days covered, eligible vehicle types, maximum reimbursement, and if theft and loss are covered. Ask for a “Letter of Coverage” and take a hard copy with you to the car rental service.
• Just owning a card with this rental coverage feature is not enough – you’ll need to actually use your card when you book and pay for your rental. This is an important part of credit card fees overseas and usage that you need to be aware of. Also, if your credit is low, consider using this one card exclusively just for the rental. That’s because if you decline a CDW, you are liable for the deductible and some car rental companies may put a hold on your credit card equal to the car’s value. This could put the brakes on your spending plans!
• If possible, try to rent from an American-based company. Should you need to file a claim, dealing with the matter domestically can save you a lot of headaches.
• Generally, in order to use your credit card insurance benefit, you need to decline the CDW. Avoid signing any rental contracts until you have confirmed with the rental agency that you are turning their coverage down.
  Primary rental car insurance via credit card only works when there is damage to the car or theft. If you damage other cars, property or people, you’ll have to fork out the cold cash and pay. Consider augmenting your coverage with other liability plans.