How to protect yourself and your finances while traveling?

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2022 is a year when many people want to make up for the travel experiences they lost in 2020 and 2021. But some would-be travelers are understandably timid after losing money when their 2020 vacation plans were abruptly canceled and are now looking for more travel protection options.

If that sounds like a familiar situation, you may want to be a little more careful this time around. Here are some ways to protect your finances from cancellation fees and other unforeseen vacation costs.

Understand the cancellation policy

When my husband and I booked a trip to Ireland for May 2020, we reserved several Irish apartments and houses through Airbnb. Like many would-be travelers around this time, we had to cancel the trip when the Covid-19 pandemic hit – but that wasn’t the only bad news. Unfortunately Airbnb would only refund 100% of our money if we took it as credit for a future trip. If we wanted the money back on our credit cards we would only get 50% of our deposit.

That experience has taught me to read the cancellation policy the next time I book a vacation. When planning a trip, know what time you can cancel and still get your money back. See if you have to prove you have Covid or another emergency to get a refund, or if you can cancel for no specific reason.

Don’t just take the terms and conditions of a website. Read through reviews to see how easy it is to get a refund. Some companies that promise easy refunds on their website may be less cooperative in real life.

Why you should buy travel insurance

Travel insurance can help protect if something goes wrong before or during your vacation so you don’t lose money. For example, if you break your leg the day before you are supposed to leave and have to cancel the trip, travel insurance can help you get any non-refundable deposits back.

If you are already on vacation and need to go to the emergency room, travel insurance can cover the medical costs you incur.

Unlike most types of insurance, you buy travel insurance for each specific trip, not as an annual or lifetime policy. The cost of travel insurance depends on where you are going, the duration of the trip, the number of insured persons and other factors. In general, you can spend between 5% and 10% of the total travel costs on travel insurance.

Before purchasing travel insurance, shop around and get quotes from multiple companies. Be sure to look beyond just the price tag and see what you actually get with each policy. For a more comprehensive policy, it may be worth spending extra.

Many travel experts agree that you only need to purchase travel insurance when you leave the country. If you are on vacation in your home country, your health insurance should pay for emergency medical services. Using a travel credit card can cover most emergency cancellation fees. But if you go abroad, taking out travel insurance is a wise move.

Use credit cards for extra coverage

Some personal finance experts believe that you shouldn’t use credit cards because they can cause you to overspend and build up a balance that you can’t afford to pay back. But credit cards offer more travel protection than debit cards and are a useful tool, especially if you’re going abroad.

If you book a trip with a credit card, you may be able to get some of your costs reimbursed if something goes wrong. However, each card has its own terms and conditions that determine how much you receive. Most credit cards do not cover medical expenses incurred abroad, so it is often best to link a travel credit card to travel insurance.

Best Travel Cards for Protection

There are dozens of travel credit cards on the market, but not all are created equal. Here are our top picks for those wanting travel protection:

Preference for Chase Sapphire

The Chase Sapphire Preferred is one of the most popular travel cards. Cardholders receive free cancellation/interruption insurance up to $10,000 per person and $20,000 per trip. Chase also provides access to travel and emergency services, which can help if you experience any medical or legal issues during the trip. You may have to pay for costs incurred.

New cardholders can also earn an 80,000 points bonus when they spend $4,000 in the first three months. There is an annual fee of $95. Cardholders receive a $50 credit each year when they spend at least $50 on hotel purchases made through the Ultimate Rewards program. There are no foreign transaction costs.

Chase Sapphire Reserve

Like the Chase Sapphire Preferred, the Chase Sapphire Reserve includes trip cancellation and interruption coverage, up to $10,000 per person and up to $20,000 per trip. New cardholders can also earn a 50,000 points bonus after spending $4,000 in the first three months.

There is a $550 annual fee, but Chase also offers a $300 credit if you spend that amount or more on travel-related purchases. There are no foreign transaction costs.

Capital One Venture Rewards Credit Card

Cardholders receive complimentary travel accident insurance when booking a trip with the Capital One Venture Rewards credit card. The card also comes with a 60,000 point bonus when you spend $3,000 in the first three months. The bonus is worth $600 in travel purchases.

You’ll also earn five miles for every dollar you spend on hotels and rental cars booked directly through Capital One, along with two miles for every dollar you spend on all other purchases.

You can book travel directly through the Capital One Travel portal. The card has an annual fee of $95 and there are no foreign transaction fees.

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Zina Kumok (170 posts)

Zina Kumok is a freelance writer specializing in personal finance. As a former reporter, she has covered murder trials, the Final Four, and everything in between. She was featured in Lifehacker, DailyWorth and Time. Learn how she paid off $28,000 in student loans over three years at Conscious Coins.