Fee cards free travel insurance has costs

Travel insurance benefits of fee paying credit cards are not always worth the money, claims comparison website Moneyfacts.co.uk.

With growing numbers of providers are charging fees on free card accounts, the website has claimed that even monthly or annual fee paying customers are not getting the best deals.

In particular, "free" travel insurance, which is provided as a benefit or an incentive to fee paying customers, is often more expensive than policies that could be found elsewhere.

Some cards make this benefit conditional on the customer purchasing travel arrangements with the card, incurring transaction costs and interest which could drive the price over what they could find on the market.

Michelle Slade of Moneyfacts.co.uk also warned customers that the free travel insurance might not always be right for them, warning: "Before you travel, check the policy covers all you need. Is it worldwide or just for Europe? Does it cover an individual or your family? Does it cover winter sports? Are existing medical conditions covered? What are the maximum payouts?"

Finding cheap but adequate cover is important as around 12 million Britons go into debt as a consequence of paying for holidays and arrangements and up to a quarter of them do so do it by paying on credit, according to CreditExpert.co.uk, an online credit monitoring service.