People lounge at Tom Bradley International Terminal at the Los Angeles International Airport on June 14.Andy Bao/The Associated Press
Many credit cards come with an annual fee – some as high as $799. If the benefits the card brings are worth it, that fee is easier to justify. But be warned: Some of the perks may be overrated.
Airport lounge access
With unlimited food, free drinks and comfortable seating, it’s no wonder airport lounges are highly appealing for travellers. However, the allure fades quickly if you’re flying from a major Canadian airport during peak hours, such as early in the morning or after work.
Food quality is inconsistent, and seating tends to be sparse. This assumes you can even get in since overcrowding has led to long lines and lounges will turn people away when they’re at capacity.
Given that more than a dozen credit cards in Canada now offer airport lounge access, it’s no surprise that lounges have become packed. Airlines and lounge providers are struggling to meet demand. To be fair, this isn’t an isolated problem for Canadian airports. Any central hub – such as Los Angeles, London and Doha, to name a few – also struggles with crowds during peak travel times.
If you’ve signed up for a credit card believing that lounge access is worth more than the annual fee, you may want to rethink that decision. That said, when lounges have reasonable – or no – crowds, it is a great way to start your travels.
WestJet companion voucher
The WestJet RBC Mastercards have an annual companion voucher. It allows a passenger travelling with the primary cardholder to pay a reduced base fare of $119 for travel within Canada or the continental United States or $399 for the rest of the WestJet network, plus any taxes, fees and other ATC.
ATC – or air transportation charges – are standard in the airline industry and typically include things such as airport fees, tourism taxes, facility charges, etc. However, when using the companion voucher, WestJet typically adds an “Other ATC” fee, which is not added when paying for a cash fare for the same route.
Travellers have recently noticed that when using their companion voucher on select routes, an “Other ATC” fee of $20 is applied, which begs the question of whether the companion voucher actually should be advertised at $139 and $419, respectively.
When reached for comment, Julia Kaiser, media relations adviser at WestJet, wrote in an e-mail: “‘Other ATC’ is added to most WestJet fares, including fares booked with Companion Vouchers. ... ‘Other ATC’ was implemented more than 15 years ago and has fluctuated over time. ‘Other ATC’ is disclosed at all points in the guest booking journey.”
However, current and former WestJet employees who are familiar with the fee and spoke with me confidentially say WestJet’s revenue management team uses “Other ATC” as part of its pricing strategy to address high demand periods and increased fuel costs.
While it’s true that “Other ATC” is disclosed when passengers book their flights, there’s never a formal breakdown of what’s included in that fee, so it’s a bit deceiving. This additional $20 is clearly being added to those using a companion voucher, but it’s never mentioned anywhere when people sign up for the credit card.
The value of the companion voucher is further debatable considering the voucher only applies to the base fare. In some scenarios, the base fare is lower than the cost of the voucher’s co-pay, so there are no savings at all.
The WestJet Mastercards still offer value for travellers who enjoy flying WestJet, but the companion voucher’s value is questionable upon further inspection.
Travel insurance
Make no mistake, credit-card travel insurance is better than nothing, but the limitations can haunt you if you ever need to make a claim.
With credit card travel insurance, the underwriting is done at the time of the claim. For example, let’s say you have a heart attack abroad and need to make a claim through your credit card insurance.
Your insurance provider will check your medical history, looking for a reason not to pay out. If they find that you had visited your doctor earlier and complained about chest pains, they could reasonably deny your claim, citing a pre-existing condition.
Now, compare that with an insurance policy purchased separately from a provider such as TuGo or Manulife. The underwriting is done at the time of purchase since you would answer a medical questionnaire. Any potential flags would be addressed immediately. Even if you have a previous medical condition, an included or optional stability clause would likely still give you coverage.
Additionally, certain conditions exist to qualify for your credit card travel insurance. You may need to pay for the entire cost of your flights and hotels with your credit card. Credit card travel insurance also only covers you for a set number of days. This can be problematic for those aged 65 and older as the standard coverage time is limited to three days.
If you’re under 55, many credit card travel insurance policies are likely adequate. However, if you’re older or have any health concerns, you’re better off purchasing a separate policy where you know exactly what you’re covered for in advance.
Barry Choi is a personal finance and travel expert at moneywehave.com. He was previously affiliated with TuGo and WestJet but currently has no relationship.
