Travel Navigator: Be aware that credit card benefits for travelers are vanishing

Don’t look now, but banks and their airline partners are slowly and quietly removing credit card benefits that travelers rely on. If you’re planning a trip soon, you might want to read your cardmember agreement carefully -- otherwise, you could find yourself without important perks you thought you had.

Among the biggest recent cuts:

· Discover deleted several key benefits for travelers, including purchase protection, auto rental insurance, and flight accident insurance.

· Chase cut its lost-luggage protection, travel-accident insurance, and trip-cancellation and trip-interruption coverage from some of its cards.

· Citi eliminated purchase protection, lost-baggage protection, and trip-cancellation and trip-interruption insurance.

Why? Credit card companies claim that travelers weren’t using the benefits. But experts say that’s a half-truth.

"I’m confident that changes to the programs are motivated by attempts to increase profits of the card issuers," says Chester Spatt, professor of finance at Carnegie Mellon University’s Tepper School of Business. He says the reason given by the card companies doesn’t make sense. If no one used the benefits, then they wouldn’t be expensive to maintain. So why drop them?

The travelers who know about the changes are trying to decide what to do. Should they cancel their cards or stay and buy the benefits elsewhere?

Travelers who don’t know about the changes may find out the hard way this summer when they take vacations with the assumption that their cards cover them. That’s why it’s so important to check your card benefits now.

Some cardholders are already unhappy. Lynda Condie, a retired midwife from Mendham, N.J., says she was "devastated" when her Chase United MileagePlus credit card stopped providing travel insurance benefits.

"We had used that benefit twice -- once when my father died and another time for a cruise," she says. "It was great for peace of mind and saved a lot of money."

She plans to cancel her United Airlines-affiliated card and says she’s enjoying the freedom to book any airline she wants, independent of point or status considerations. "Looking back," she says, "the card was a bit of a millstone around our necks."

Jen Kelley, a part-time accountant from Atlantis, Fla., has used the benefits on her Citi-American Airlines World Elite Mastercard several times, including when she broke her ankle last year before a vacation.

"I pay attention to the benefits, especially the insurance benefits," she says. "I won’t be renewing the card."

Many travelers see the removal of benefits as a betrayal. For years, these cards were promoted as a boon for people who travel, with opportunities for earning points toward airline tickets and with insurance coverage that protected their vacations. Credit card companies and airlines strongly implied that these benefits were essential parts of the product.

On another level, the erosion of benefits may signal the end of a decade of excess in which travel credit cards tried to outdo one another, lavishing points and miles on their members. If that is the case, it hasn’t happened a moment too soon. Too many travelers are in the grip of credit cards that drive bad consumer decisions.

How do you know if you’re holding a devalued credit card? First, if you haven’t done so already, locate and review your cardmember agreement.

Your credit card company must disclose the terms in writing, and you can always dig up the latest version on the credit card issuer’s website. You’ll find important information such as the annual interest rate and minimum monthly payment. You’ll also get information about such benefits as insurance and lost-luggage coverage.

Your credit card company must also disclose any changes to your cardmember agreement in writing. Many consumers see these notices as junk mail and throw them away.

If you’re unsure about a perk, call your credit card company. That’s what I did before a recent trip to Europe. Concerned that I might get hit with a foreign exchange fee, I checked my cardmember agreement. Sure enough, my credit card charged a 3% fee.

Time to switch cards? I called my bank to check my options. After a few transfers, a representative agreed to waive the fee. Problem solved.

If you find yourself without the coverage you expected, the short-term solution is simple. Consider a travel-insurance policy that will cover you for as long as needed, and then switch cards.

And don’t forget, credit card networks such as Visa and Mastercard require that participating cards provide certain benefits. For example, Visa’s standards include zero fraud liability and emergency card replacement. The networks may step in to fix the problem of benefit erosion, predicts Cyndie Martini, chief executive of Member Access Processing, which provides Visa card services for credit unions.

"I expect to see more mandatory benefits from brand networks to maintain loyalty," Martini said.

Until then, check your mail for notifications from your credit card company heralding changes in your agreements. And when it comes to travel benefits, assume nothing.

Christopher Elliott is a consumer advocate, journalist, and co-founder of the advocacy group Travelers United. Contact him at chriselliotts.com.