Is credit card travel insurance good value for money?

There are now a number of credit cards on the market that charge monthly or annual fees to cardholders, and in return offer benefits such as 'free' travel insurance.

However, industry professionals are not convinced that this travel insurance is actually value for money for consumers, arguing that in some cases it may not even be worth the monthly or annual fees that consumers are paying for cards. Some experts state that consumers could be better off looking for a fee free credit card and finding their own travel insurance cover as and when required.

Officials from Moneysfacts.co.uk state that many consumers may be getting a raw deal on this type of deal, as the travel insurance cover may not even be suited to the needs of the cardholder. For many consumers this travel insurance cover, which is touted as being free to fee paying cardholders, is therefore more expensive that policies that can be purchased independently over the Internet from other insurance providers.

One official from Moneyfacts stated that consumers need to check whether the travel insurance offered on these credit cards is even suited to their needs.

The official stated: "Before you travel, check the policy covers all you need. Is it worldwide or just for Europe? Does it cover an individual or your family? Does it cover winter sports? Are existing medical conditions covered? What are the maximum payouts?"

These credit cards often only offer this travel insurance cover on the condition that the cardholder uses the credit card to purchase the vacation or travel, which means that the card issuer also benefits from interest charges on top of monthly or annual fees.

Tom Smith
7th June 2007