Paying for credit card travel insurance you can't use?
Why switching credit cards is worth considering if an overseas trip isn’t on your radar.
International travel insurance is touted as a perk with some credit cards, typically “platinum” cards with higher annual fees.
But unless it’s a quick trip across the Tasman, jet-setting these days is out of the question for most of us. That means the travel insurance benefit you’re paying for with these cards isn’t much use.
What we found
We reviewed 11 credit cards that advertised international travel insurance as a cardholder benefit. Annual fees ranged from $80 to a steep $390 (see our Table).
You might expect a reduction in annual card fees, given international travel has been on hold for the past year.
But that hasn’t happened.
The Westpac Airpoints and Hotpoint World Mastercards were the most expensive of the cards, with annual fees of $390.
The bank said the travel insurance perk had benefited “thousands of credit card customers” who had to cancel bookings when Covid-19 hit. However, it hasn’t made any changes to its card fees in the past 12 months.
With the exception of ANZ, none of the other providers have dropped fees either.
An ANZ spokesperson said it’s removed travel insurance from its Cashback Platinum card and reduced the annual fee from $125 to $80. It continues to offer travel insurance with its Airpoints Visa Platinum card, which costs $150 a year.
Kiwibank, which advertises overseas travel insurance as a benefit with its platinum cards, said the cover has been temporarily stopped. Tower Insurance, which underwrites the cover, has put a halt on issuing any new travel insurance policies.
Companies were keen to promote the other benefits of their cards, such as Airpoints. However, unless you’re a big spender, you might not get much benefit from these rewards. Our research found you have to spend big to earn big.
You might be better off switching to a card with a low or no annual fee.