How a Canadian Credit Card Can Protect Your Holiday Travels

Nearly 2 in 5 Canadians (37%) plan to spend money on flights or hotel stays this upcoming holiday season; among them, three quarters (75%) plan to put some or all of those travel expenses on a credit card, according to NerdWallet’s 2022 Canadian Holiday Travel Report.

And that’s a wiser decision than many may realize.

For more than 16 years, I’ve travelled for weeks to months at a time, many times a year. Amid all this wandering, I’d be utterly lost abroad without my credit cards. These small rectangles of plastic and metal offer powerful protection for me, my identity and my accounts, while adding value to my current and future travels. And they can do the same for you, this holiday season. Here’s how.

Coverage for delays and disasters

Fifteen percent of those planning to spend money on flights or hotel stays during the 2022 holiday season are worried about their checked bags being lost while travelling, according to the NerdWallet report.

Charging flights and checked bags to a 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.

When somebody swiped my credit card information while I was on holiday in Australia and bought $8,000 in Halloween costumes on eBay, my credit card company didn’t blink. They refunded the charges, cancelled the card and rushed me a new one — in Australia! The same thing happened a few years later (minus the Halloween costumes) in Switzerland, and again I emerged unscathed.

Although zero liability benefits are a common feature of the best Canadian 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

Twenty-six percent of 2022 holiday travellers plan to travel abroad, according to the NerdWallet report. What these international adventurers might not realize is that whenever you charge a purchase in a foreign currency, credit card companies will often tack on an additional 2.5%-3% 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 will 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 protection and 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 credit cards. At least one of the cards should be a Mastercard or Visa, 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.

DIVE EVEN DEEPER

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