One of the biggest reasons to use a credit card is undoubtedly the protection it can offer. While cash may have been king a long time ago, the rise of the credit card has long been established as the best method for making a purchase, offering both benefits and consumer protections.
As one Redditor points out in the r/personalfinance subreddit, buying an airline ticket with a credit card is the only move most people should make. Nowhere has this been more evident lately than with an airline that recently shut down.
Silver Airways
On June 11, Silver Airways, a regional airline based in Florida, abruptly shut down, canceling all of its flights and leaving customers stranded. With the company announcing it was entering bankruptcy, it immediately led to hundreds of questions on social media about what would happen to all the passengers with existing airline tickets.
Well, here’s the kicker: customers who purchased with credit cards will receive full refunds to their original form of payment. However, those who did not purchase by credit card will “still be eligible for refunds,” but would need to “get in line with other airline creditors.”
In other words, if you didn’t pay with a credit card, you are going to get a refund, but you’re likely going to have to wait. The challenge is that non-credit card buyers will have to wait in line with other airline creditors, which means any refunds could take a considerable amount of time.
While the writing might have been on the wall for Silver Airways for a while, this doesn’t help customers who purchased with other forms of payment. It’s for this reason that you should always use a credit card for these kinds of purchases, even if you only use your credit card sparingly otherwise.
Better Consumer Protection
While using a debit card might be an easy way to budget, since you can only spend what you have available, there is no question that credit cards are better overall. When it comes to consumer protection, credit cards, although they can charge exorbitant fees, are just better for consumer protection.
While credit card banks are profit-driven, they also recognize that standing by their customers generates additional word-of-mouth marketing and can help establish loyal users. It’s for this reason that you can be assured of better consumer protection overall. This is true for some basic level benefits, such as purchase protection, extended warranty, and rental coverage.
The reality is that few people actually take advantage of these benefits, so the credit card banks aren’t exactly doling out billions per year as part of these benefits. Most importantly, credit cards can offer chargeback rights, so you can dispute a charge for any goods or services that were not delivered, which is likely the case here. The credit card company has to investigate the issue, but for Silver Airways ticket holders, this seems like an obvious, open-and-shut case, considering it’s so public.
Always Pay With Credit
The next time you consider purchasing travel-related items, such as a cruise, airplane ticket, or hotel room, use a credit card. Depending on the credit card, not only will you have some benefits like cash-back or points, but you will also get a host of other benefits.
For example, both the Chase Sapphire Reserve and Preferred cards offer trip cancellation and interruption insurance. This means that you can be reimbursed up to $10,000 per covered traveler for any non-refundable travel expenses, which will cover the cost of the Silver Airways airline ticket. Better yet, this same protection applies to hotel rooms, tours, and any other passenger fares, such as bus tickets.
It’s a great idea to look at your credit card’s refund policies before booking, and even if your credit card doesn’t offer travel insurance, there are plenty of third parties that do. Of course, be sure to review your credit card statements regularly to identify any unauthorized charges and promptly contact the credit card processor if you find unfamiliar charges.
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