How a Canadian Credit Card Can Protect Your Holiday Travels

Fourteen percent of Canadians plan to spend $1,000 or more on 2023 holiday-travel related expenses, like flights and hotel rooms, according to a survey of over 1,000 Canadian adults conducted by The Harris Poll on behalf of NerdWallet Canada.

A thousand dollars is a decent chunk of change, and for many, some of those costs could be charged to a credit card. That’s a wiser decision than they may realize.

Though small, these rectangles of plastic and metal offer mighty protections that can come in handy during the often unpredictable holiday travel season. Here’s how.

Coverage for delays and disasters

Of those planning to spend money on flights or hotel stays during the 2023 holiday season, 7%
are worried about their checked bags being lost while travelling, according to the NerdWallet
survey.

Charging flights and checked bags to the right travel credit card can be a way to jettison some
of this fear.

Why? Because some credit cards include automatic travel insurance, which can help offset the
cost of myriad disasters that can occur during the course of a holiday trip — including lost bags.

Common types of credit card travel insurance coverage:

Emergency travel medical.
Trip cancellation / trip interruption.
Trip delay.
Delayed/lost baggage.
Hotel/motel burglary.
Travel accident/common carrier.
Auto rental collision/loss damage.

Before you rely on credit card travel insurance as your sole form of insurance protection, be sure you understand the terms and conditions of the coverage, and whether it’s suitable for your upcoming trip.

For example, emergency travel medical coverage will limit the number of days per trip or per year that you are covered, and auto rental insurance will include comprehensive coverage but rarely covers third-party liability.

Protection against fraud

If somebody steals your wallet full of cash, there is no recourse. But if your credit card is stolen and fraudulent purchases are made, you probably won’t be liable.

Although zero liability benefits are a common feature of the best credit cards, the terms aren’t to be taken for granted: You must practice “reasonable care” to safeguard your card and information. For example, if you create an easy-to-guess PIN based on your birth date or telephone number, you could be liable.

Relief from currency conversion fees

Seven percent of those planning to spend money on holiday travel in 2023 plan to travel abroad, according to the NerdWallet survey. But what many international adventurers don’t
realize is that whenever you charge a purchase in a foreign currency, the card issuer will often
tack an additional 2.5%-3% on to the prevailing currency conversion rate.

These foreign transaction fees aren’t itemized on your statement so you won’t immediately notice, but the extra 3% on everything you charge may take a bite out of your travel budget.

You can get around this by using a credit card with no foreign transaction fees. These cards will
perform the currency conversion at the bank rate, giving you the best conversion rate possible
while you are travelling.

How to maximize your credit card’s protective benefits

DO:

Book travel using the card with the best insurance. A common condition of credit card travel insurance coverage is that the entire fare or reservation must be charged to the card. Review your card’s terms and conditions to understand the exact requirements of its insurance policies.

Bring at least two different cards. One of the cards should be a Mastercard or a Visa credit card, as these are the two most widely accepted cards around the world.

Keep your issuer’s phone number handy. If your card is stolen or information compromised, the first thing you need to do is call the company that issued it. Also, it’s not uncommon for your credit card to be flagged or blocked abroad, even if you notify the issuer in advance of your travels. When this happens (which you’ll inevitably discover while trying to make a purchase), you can use your other card to make the payment. Then, call the issuer to inquire about the declined transaction and let them know it was indeed you making the purchase, and they’ll unlock the card.

Sign up for online banking and email notifications. This will allow you to monitor transactions online and make payments while you’re away, and the email notifications will be important if the bank needs to contact you (for example if they’ve flagged your card for fraud). If you see charges that you didn’t make, contact the credit card company immediately. Monitoring expenses can also help you stay on track with your travel budget.

Download the card issuer’s app, and secure your phone. Accessing your credit card account via an app on your phone makes it easy to monitor charges and catch discrepancies, and in some cases you can lock the card from the app (before calling the issuer). Because your account has sensitive information, it’s important to set up 2-factor authentication for the app, and create a unique pin to lock your phone when not in use.

Use an RFID-blocking wallet. RFID has enabled the convenience of tapping your card to pay, but it has opened opportunities for scammers to swipe your information using the same proximity-based technology. Keeping your cards in an RFID-blocking wallet or sleeve prevents this from happening.

DON’T:

Use your credit card to withdraw cash from ATMs. This will not only trigger a fixed withdrawal fee, but since it is considered a cash advance, the interest-free grace period is nullified and you’ll be charged interest on your entire balance from the date of withdrawal.

Keep all your cards in one place. If your wallet is stolen and all your cards are in it, you’re out of luck. Keeping a spare card tucked away in a separate bag will protect you against loss, damage, theft, and fraud.

Survey Methodology

This survey was conducted online within Canada by The Harris Poll on behalf of NerdWallet
Canada from October 3 – 5, 2023 among 1,021 Canadian adults ages 18 and older. The
sampling precision of Harris online polls is measured by using a Bayesian credible interval. For
this study, the sample data is accurate to within +/- 3.6 percentage points using a 95%
confidence level. For complete survey methodology, including weighting variables and subgroup
sample sizes, please contact Bria Weaver, [email protected].