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Which credit cards offer the best benefits?

By Leslie McFadden · Bankrate.com
Wednesday, April 21, 2010
Posted: 10 am ET

Do you know if your credit card offers an extended warranty? How about trip cancellation insurance?

Built-in cardholder perks vary from issuer to issuer, and an explanation of benefits to customers also varies in visibility, new research from Corporate Insight shows.

"The only ones that are really industry wide are the often talked about, but often misunderstood, automatic auto rental insurance and then also a promise of zero percent fraud liability and live customer service," says Doug Miller, senior analyst for Banking and Cards at Corporate Insight, a financial services research firm. Consumers may know not know which types of coverage they can skip on the car rental form, he explains.

The study included the most popular self-branded card from each of the 10 largest credit card issuers in the United States: American Express, Bank of America, Barclaycard U.S., Capital One, Chase, CitiCards, Discover, HSBC, U.S. Bank and Wells Fargo. When issuers offered cards on more than one processing network, one card from each network was used.

The "Built-In Card Benefits" Report gave the highest grade, an "A," to American Express for its comprehensive benefits package and communication of benefits to cardholders. User benefits include extended warranties, purchase protection against loss, damage or theft of items within 90 days after their purchase and identity theft  assistance.

Citi had the next highest grade, an "A-." It offers car rental discounts at Hertz, air travel trip insurance and lost luggage assistance. Discover followed with a "B" score, and provides emergency travel assistance when trip tickets are purchased with the card.

The report also noted that American Express, Citi and Discover did the best job of providing benefit details to current and potential cardholders.

"We were surprised by the number of firms that offer only cursory information," says Miller. "We think this a good opportunity for card issuers to promote something positive."

Not all perks are free. For example, American Express charges an optional fee for flight insurance and Discover assesses a monthly charge for identity theft and lost wallet services.

Some of the other results:

  • Eighty percent of issuers provide extended warranties that add 12 months of coverage onto the original manufacturer's warranty, but restrictions vary. Capital One and Citi provide the coverage only when the original warranty lasts a year or less, for example, while American Express will extend coverage on original warranties of up to five years.
  • Chase and Citi offer automatic trip cancellation insurance.
  • American Express, Citi and Capital One offer price protection, where customers can get rebates for purchased items for sale at a lower price elsewhere
  • Wells Fargo, Citi and American Express offer lost or stolen wallet assistance.
  • American Express, HSBC and Citi offer theft and breakage protection for a limited time after purchase.
  • Seventy percent supply emergency travel support for customers that pay for tickets or hotel stays on their credit card. Only three issuers include flight benefits, such as ticket discounts and assistance with delayed flights. Four issuers provide compensation and help with delayed baggage.

What benefits do your cards offer?

While the perks mentioned in the study certainly aren't new, they serve as a reminder to check out the free and fee-based benefits offered on your existing cards. The built-in services might come in handy the next time you make a large purchase or take a trip. If you can't find details online, call customer service or use the issuer's secure messaging system to ask a question.

I've definitely used some of the built-in perks on my cards. For example, two of my credit cards provide free access to my credit score. While neither free score is the widely-used FICO score, I still get a sense of how my credit risk changes over time.

Have you used any of the built-in benefits in the study? What would you like to see cards offer?

Follow me on Twitter at www.twitter.com/ccadviser.

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