For those who collect (and spend) points and miles, deciding which credit card to use when making a purchase is a straightforward process. For most, the card providing the largest return is the one you’ll use. There are some calculations to do considering how much each different point is worth to you but for the most part, the card with the biggest return wins.
If you’re thick into the weeds of maximizing return, you might know of a workaround to get even more points. You may be able to buy a gift card at Staples for 5x points or you might just pick up a discounted gift card on eBay to save 10%. Don’t forget to use a shopping portal for extra points.
For me, there’s one more thought that I need to consider; what card will give me the best insurance coverage for this purchase. It’s not a popular stance, but I’ll give up points for better coverage. Here’s some of the categories where coverage matters to me.
I’ve been using the Sapphire Reserve for our airfare expenses since it provides coverage even if you only charge a portion of the ticket (as in taxes on award redemptions.) The AMEX Platinum pays 5X points on airfare booked through the airline and now that the card also has travel coverage, it’s a strong runner-up.
I don’t like using gift cards to pay for air travel because you get no coverage if the entire ticket is paid for with the gift card.
I’m always going to use a credit card that provides primary coverage for the Loss Damage Waiver / Collision Damage Waiver. Going way back, I had a Diners Club card that provided this coverage. When I received the United MileagePlus card, it was my main way to pay for rentals. I didn’t care if it wasn’t the best card to earn points, because I was using it for the coverage. Now I can use the Sapphire Preferred or Sapphire Reserve for our rentals and have coverage for damage to the vehicle.
Several business cards also provide primary coverage but one provision listed is that the vehicle is being used for business use when the damage happens. I’d rather not have to deal with explaining that to the insurance company.
Many cards now include cell phone replacement coverage due to damage or theft as a perk, provided you pay the monthly cell phone bill with the card. I have an Ink Business Preferred card that earns 3x points for cell phone bill charges and provides cell phone coverage. Now, I also have an Ink Cash that would pay 5x points for the same charges but I’ll forgo the extra 2x points for the extra coverage. The higher your cell phone bill, the more you’d have to consider if the extra points would be better (and you can always insure your phone yourself).
One last category where I’ll go with a card with better coverage is with large purchases. I’ll look for a card with purchase protection and an extended warranty (for items like electronics and appliances). Purchase protection covers you if an item breaks shortly after you buy it, within the first few months. An extended warranty provides additional coverage after the manufacturer’s warranty expires.
You never think of these coverages until you need them but I’ll always consider them for a purchase where I think they might be needed.
These are just some of the categories where I’ll forgo earning the max amount of points and miles in return for getting better insurance coverages. I already earn points faster than I can use them. Having a safety net when I travel or make an expensive purchase gives me peace of mind that is worth more than the points I’m missing out on.
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