Most American travelers with a travel credit card overestimate what their card actually covers.
A survey of 4,700 travelers by Squaremouth revealed that 90% believed they understood their card’s protections, with over half claiming full knowledge. When tested on basic exclusions, those same travelers showed significant misunderstandings.
Common misconceptions about card protections
Pre-existing medical conditions are a major gap in awareness. Sixty-two percent of respondents did not realize most travel credit cards exclude claims related to health issues diagnosed or treated within 60 days of booking. The same share was unaware that cards restrict covered cancellation reasons and often reimburse far less than the total trip cost—usually up to $10,000 per person, though one popular card limits coverage to $2,000.
Over half did not know protections only apply to purchases made with that specific card. If a trip is paid partly with points, miles, or another card, coverage typically does not extend to those portions. Nearly half were unaware that travel credit cards provide minimal emergency medical coverage abroad. Squaremouth’s analysis found only one card includes such coverage, capped at $2,500 with a $50 deductible.
One-third admitted they did not realize card protections were not enough on their own. The issue affects even premium cardholders. Co-branded airline and hotel cards, held by 30.2% of respondents, generally offer the weakest protections despite their popularity.
This misunderstanding can lead to serious financial risk. A traveler booking a $15,000 trip to Europe, paying half with points, and canceling due to illness might expect reimbursement. Instead, they could face a total loss.
Premium cards focus on rewards, not security
Chase Sapphire and American Express cards, used by nearly half of respondents, are often promoted as top-tier travel options. Yet three of the four major premium cards exclude emergency medical coverage. Travelers falling ill overseas may end up paying out of pocket without separate insurance.
“Think of your credit card as a bonus to travel insurance, not a complete solution,” said Chrissy Valdez, senior director of operations at Squaremouth. “Our data shows most travel cards prioritize rewards over protection.”
For international trips, Squaremouth advises medical coverage of at least $50,000 for emergencies and $100,000 for evacuation. Primary health insurance rarely applies abroad, and even a brief hospital stay can exceed a card’s limits. Travelers with pre-existing conditions should avoid relying on card protections and choose a policy with a waiver instead.
Trips over $10,000—or those paid with points, miles, or multiple cards—also need full coverage. Many policies cost just a few dollars per day, offering affordable security.
The survey did not explore why travelers overestimate their protections, but marketing likely plays a role. Credit card ads highlight rewards and perks while downplaying exclusions. Most travelers only review the fine print after a problem arises.
