New Discover Escape Card

Discover has introduced a new travel-rewards credit card. The Escape Card’s rewards are similar to many other “fake miles” cards, such as some Capital One, Merrill, and American Express cards. The Escape Card gives you 2 miles for every $1 spent – working out to a 2% reward ratio (but only 1% if you want to redeem your miles for cash instead). That’s better than some of the other cards’ reward ratios. However, like the other fake-miles cards, instead of actual air miles you are given credit that can be applied to any travel purchase made with the card.

Offsetting that 2% reward ratio is a $60 annual fee, although you receive 1,000 “bonus miles” every month for the first year. (There have been some reports of the 1,000 miles bonus for 25 months, but we can not find that offer on Discover’s website.)

But the intriguing part is the inclusion of primary car rental insurance (as well lost or damaged luggage insurance, travel delay insurance, and trip cancellation insurance). Note that for international use, Discover will be instituting a 2% foreign-currency-exchange fee in May. (Outside the U.S., Discover cards are currently only accepted in Canada, Mexico, the Caribbean, Central America, and China.)

We actually believe this type of fake-miles-reward card can be useful for some types of spenders and travelers. For infrequent flyers looking for some “incentive” to save for that basic economy ticket, these cards might be useful, and may have more perceived travel value than the same level of cash rebate.

Nonetheless, we think there are other cards with which you can usually obtain rewards that are better than 2%. If a flat 2% (for all purchases) is all you want, you can get that with the Schwab Visa (with no annual fee). Still, if you like Discover’s products, the Escape Card may be worth looking into – that primary car rental insurance is quite enticing.

Credit Card, ATM, Cell Phone, GPS Europe Travel Updates

We tried some new cards and toys in Europe this month, and thought we’d give a quick wrap-up.

Our Garmin GPS worked well, but had some of the same limitations we’d noticed in the states. Even with the newest maps, it still didn’t know of some intersection/roundabout changes, and it sometimes tried to take us on bizarre routes. Nonetheless, it was a great tool, but we wouldn’t drive with the GPS alone and without maps.

Our Capital One Visa worked every time. Every merchant (even tiny, out-of-the-way petrol stations) accepted our swipe card (nearly all Euro cards are now “chip-and-pin”). Our JCB card was not accepted at a merchant (a pub) that advertised JCB acceptance.

The Schwab ATM card also worked flawlessly, and previous use has indicated that any ATM fees will all be rebated. That means the old advice of getting large sums fewer times can be put to rest. If you’re uncomfortable carrying large amounts of cash, you can hit the ATM (“cashpoint” in Brit-speak) as frequently as you like and not worry about ATM fees.

We used several mobile (cell) phone chips this trip. A very old Orange (UK) chip that we figured was long dead still worked with what little time we had left on it. A new Vodafone (UK) chip also worked great. The UK chips are easy to top up all across the country, in shops and even at ATM machines. We chose Vodafone because they allegedly had the best coverage in Scotland, and that appeared to be so. Vodafone also has a plan (their Passport sevice) where you can set up international roaming in some countries (mostly in Europe, but also Australia and New Zealand) that costs the same as UK calls. Roaming in other countries still works, but charges are higher. In addition, we tried our 09 (Iceland) “international” chip, and despite being a “call-back” type system (dial, wait, your phone rings, answer that ring, and then get connected) it also worked every time we tried it.

Finally, despite our frequent complaints about car-rental ripoffs, we were quite pleased with the car, price, and service we received from Hertz (we rented at Heathrow and drove throughout England and Scotland). We paid for the rental using an American Express card, which gave us primary CDW coverage for only $20 for the entire rental period – a bargain at only a buck a day in our case.

Car Rental Insurance with American Express Cards

In the never-ending battle against car-rental ripoffs, here’s another tool to consider.

American Express offers a $19.95 car rental insurance policy that is primary rental insurance. Insurance provided by all other credit cards (except Diners) is secondary – in other words, the credit-card insurance only kicks in after you’ve gone through your personal auto insurance provider to try to resolve the issue. The Amex policy is valid anywhere in the world except in Australia, Ireland, Israel, Italy, Jamaica, or New Zealand (which is typical with most credit-card car-rental insurance coverage).

(There are some slightly different coverages and options, depending on what state you live in. See the Amex site.)

The Amex coverage is for the entire rental period (for up to 42 days), not per day. This seems like a cheap way to give yourself an additional layer of protection, especially if you’re a leisure traveler who rents a few times a year for longer periods (rather than a business traveler renting for a day or two many times a year). You are required to register your Amex card, but there are no charges until you reserve and pay for your rental with your Amex card.

Car Rental Tips

In our opinion, there’s no such thing as a “good” rental car company – there are just varying degrees of “less bad.” The Upgrade blog recently mentioned a Dollar “top-up” charge for returning a car with a full tank. Just last week, we were told by a Budget agent that if we drove too little (“less than 75 miles”) that they would fill up the gas at their price, whether we wanted it or not. Where do they find the lawyers to dream up and write this stuff?

When you rent a car today, you’ll be asked if you want to upgrade, if you want extra insurance, if you want a GPS system. Plus, we’ve heard far too many horror stories of “fake” car damage that the customer is charged for to not believe them. If you’re renting a car anywhere, it’s truly become Buyer Beware. So here are our tips.

1 – Reserve online, which should give you a price guarantee. Keep a copy for when you get to the rental counter.

2 – Decline everything. Upgrades, insurance, everything.

3 – Use a Visa or American Express card to pay for your rental. These cards seem to provide better supplemental rental insurance than does MasterCard.

4 – Offer the rental counter a “second” credit card for them to imprint when you pick up your rental. The car company may (as do some hotels) put a “block” on your card for an absurdly high amount (sometimes several thousand dollars), and if you have a lower credit limit on your card the block may effectively reduce or even cut off your credit line. Assuming you have more than one credit card (and we suggest you always travel with at least two cards), offer one when you rent the car (and the same card when you check into a hotel), but upon return of the car (or check-out from the hotel) pay the final bill with your “main” card if you prefer. (While this is a good option, many car rental companies now use a quick-return scanner that spits out a credit card slip for the card you rented with. If you want to change cards, you may have to return to the counter, and not use the quick-return option.)

5 – Carry a digital camera and take pictures (dated!) of the car from all angles, inside and out, when you pick it up and when you drop it off.

6 – Save your paperwork long after your travels, in case you need to dispute anything later.

7 – As we said, decline supplemental insurance, especially in the U.S. Assuming you have your own auto insurance, it should cover you adequately, especially with the additional coverage provided by your credit card. Do your homework before renting internationally. Several reports indicate that Visa may be the best card to use for overseas car rentals. We’ve also heard that there are a few foreign countries where you do need to (or have to) accept the supplemental coverage offered. We’ve heard that Mexico, Italy, Australia, Ireland, Israel, Jamaica, and New Zealand can be problematic – we haven’t rented in any of those countries recently, so don’t have up-to-date first-hand knowledge.

Pray that's not your rental car.

Rental Car Rip-Offs

We're working on a more comprehensive rental-car article (with tips and information), but in the meantime, read this post on the Upgrade blog. We've recently had good luck with Hertz and Budget, but the rental-car companies are getting out of hand with absurdity such as this.