Know Your Credit Card's Rules for CDW

Sam paid for his auto rental in advance before leaving for Europe. He got an excellent dollar-guaranteed rate and avoided the three-percent foreign transaction charge that his credit card would have imposed had he waited to pay in Europe. When he finished the rental, however, the rental company handed him a bill for the local road/registration tax, a fee of about 6 euros. Since Sam was returning to the U.S. and wanted to get rid of his euros, he paid in cash. Big mistake. You see, there was also minor damage to the car, which the rental car company routinely billed to his credit card a few days later. When the rental company sent Sam the bill in the U.S., he turned to his credit card for reimbursement under their free CDW coverage. In order to be eligible for credit card insurance, however, the renter must pay the entire cost of the rental with the credit card. Since Sam had paid for an item (the road tax) on the car rental invoice in cash, there could be no reimbursement. He had to pay for the damage himself. Fortunately, the car was only scratched and the repair bill was about $630. Had it been totaled or stolen, Sam would have been on the hook for its full value.

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Airlines Go Too Far

The list of what airlines now charge extra for is growing fast. We’re talking mostly domestic flights but it’s sure to spread to international travel. Recently Delta announced a $50 charge for a second checked bag. (That, of course, is $100 roundtrip and $200 for a couple if they each check two bags.) USAir now charges $2 for water. Today Jet Blue announced its passengers will pay $7 if they want a pillow and blanket. That's only a portion of the list.

I’m OK with the luggage fees because of the weight and fuel thing, and it makes great sense to charge for booze, food, and even soft drinks; it’s an airplane, not a restaurant. You can also charge me for an aisle seat—anything to stay out of that middle seat—or even just a pre-assigned seat. But the line is crossed when there is an extra charge for essentials like water, pillows and blankets. Water is necessary to sustain life. People need it to stay hydrated and to take pills. Warmth and a minimum of comfort are in the same category. Like water, pillows and blankets, are, or at least should be, part of an airline’s basic creature comfort responsibility to every passenger. Besides, it’s not practical to bring pillows and blankets on board. What’s next; two bucks to rent a key to the toilet? Complain to the airlines, complain to the Department of Transportation, and to members of the Congress. As we all knew they would, they have now gone too far.

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