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With flight disruptions, natural disasters, and other issues, travel insurance has become a popular option for travelers. While you can purchase travel insurance through third-party providers (and get specific insurance when booking flights, hotels, and rental cars), you may already have credit card travel insurance at your disposal.

So, should you choose a credit card specifically because it offers travel insurance? Below, we’ll take a closer look at what credit card travel insurance is, how it works, what it covers, and why you might want a credit card with travel insurance ahead of your next adventure.

What Is Travel Insurance?

Travel insurance protects consumers against financial losses when traveling domestically or internationally. It can cover everything from lost luggage to new hotel arrangements because of canceled flights to medical emergencies while on vacation.

Travel insurance can also protect you before your trip. If something changes, like a family emergency, that will keep you from traveling as planned, travel insurance might get you a refund for your expenses.

You can find travel insurance through insurance companies, travel agents, and insurance comparison sites. Your car insurance policy may insure you even in a rental car, and certain hotel booking sites may allow you to make refundable accommodations for a fee. But did you know that your credit card may also already cover portions of your trip?

How Does Credit Card Travel Insurance Work?

Credit card travel insurance is a set of coverages offered by select credit cards to protect you when traveling on qualified trips. How credit card travel insurance works varies by card, however. It’s important to read the fine print of your credit card to understand what may and may not be covered.

The main thing to remember is that you typically need to use the credit card when booking your major travel expenses (airfare, lodging, and transportation) for those costs to be covered should something happen.

Recommended: Tips for Using a Credit Card Responsibly

Types of Travel Covered by Travel Insurance

Each travel credit card will have its own inclusions and exclusions for travel insurance. But generally, credit cards with travel insurance may offer trip protection and coverage for unexpected medical expenses.

Trip Protection

Trip protection covers a wide range of potential insurances your credit card might offer when traveling:

•   Trip cancellation and interruption insurance: If you prepaid for a trip and have to cancel it, or are on a trip and need to end it early, your credit card may cover this. Read your credit card’s policy closely to understand how your credit card works and what qualifies as a covered trip cancellation or trip interruption. Unexpected injuries or illness, inclement weather, terrorist action, a change in military orders, and jury duty are examples of reasons a trip may be canceled or end early — and be covered by credit card travel insurance.

•   Trip delay insurance: If your flight, bus, cruise, or other transportation (called a common carrier) is delayed or canceled and you miss activities or lodgings that you’ve already paid for, your credit card may cover this. In addition, such policies might cover your expenses as you scramble to find new lodging, meals, and transportation.

•   Rental car insurance: Check with your car insurance provider before booking a rental to understand if your coverage extends to rentals. If it does not (or if you do not want to make a claim with your car insurance provider), your credit card might also serve as an insurance option in the event of an accident. Read the fine print carefully; many credit cards require that you decline the insurance from the rental company for the credit card travel insurance to apply. Some credit cards only offer secondary car insurance, meaning they require you to file a claim through your personal car insurance first.

•   Delayed or lost baggage insurance: If an airline loses or damages your baggage, you can make a claim for the (depreciated) contents of the bag. Some credit cards may even cover delayed baggage since it can put a dent in your plans. Just check your policy: You may have to put in a claim with the airline before your travel credit card will step in.

Medical Coverage

Travel insurance through credit cards may cover medical expenses as well, including:

•   Medical insurance: If your health insurance doesn’t cover medical costs incurred abroad, travel medical insurance might cover qualified expenses. In most cases, Medicare does not cover health costs incurred outside of the U.S., so travel insurance can be helpful for seniors relying on a government health plan.

•   Accident insurance: While we don’t want to assume the worst can happen, this insurance sometimes offered through credit cards offers a payout if you are killed or seriously injured (such as dismemberment or loss of sight, hearing, or speech). This applies while traveling on a common carrier or on a covered trip paid for with the card. In this way, accident insurance can operate like life insurance while traveling.

•   Emergency evacuation: If you fall ill or are injured while traveling and need to be evacuated, including through emergency airlift, this coverage will pay for associated expenses. This also may cover emergency evacuations due to extreme weather or political unrest.

Recommended: Preparing Financially for Travel

Benefits of Credit Card Travel Insurance

Credit cards offering travel insurance have multiple benefits. Not all credit cards offer travel insurance, however, so it’s a good idea for consumers to weigh these benefits against benefits of other credit cards to determine which card is right for them.

Among the benefits of credit card insurance are:

•   Financial security: Travel can be a big expense. When unplanned events cut trips short or leave you stranded, travel insurance can protect the money you have spent.

•   Emergency coverage: Whether you encounter dangerous weather, a terrorist incident, or a medical emergency during travel, having travel insurance can make it easier to deal with crises while on vacation.

•   A sense of comfort: Ultimately, insurance policies can ease consumers’ worries when traveling. Knowing that there is a Plan B when your best-laid travel plans go awry can be comforting, especially when facing an emergency in an unfamiliar place.

Recommended: Tips for Finding Travel Deals

Picking a Credit Card for Travel Insurance

When looking for a new credit card, you can search specifically for cards that offer travel insurance among ​​different credit card rewards. Note that many of these can have annual fees, so they might only be a good choice if you’re a frequent traveler.

Before applying for a credit card, check your credit score to ensure you can qualify.

If travel insurance is not your top priority for choosing a credit card, you can consider other incentives, like credit card bonuses for new customers or cash back rewards.

Recommended: What Is a Charge Card?

Filing a Travel Insurance Claim

If you experience an unexpected event, like a delayed flight, during your trip, calling your credit card company to ensure your emergency expenses will be covered can be a smart idea. This might keep you incurring credit card payments for meals or lodging that won’t actually be covered.

Look at the back of your credit card to find the phone number for a benefits administrator. They can help you as you begin your claim process.

As explained previously, certain credit cards may require you to file a claim with another entity before they get involved. For example, a credit card offering secondary auto insurance requires that you file with your personal car insurance company first. Likewise, if an airline loses your luggage, a credit card’s travel insurance policy may stipulate that you file first with the airline.

When you know you will be filing a claim, saving your receipts (and taking photos of them as you go) can be a smart way to stay organized. Filing as soon as you’re home (or even while still traveling) may expedite the process. In fact, some credit card insurance policies might have deadlines for filing claims.

The Takeaway

Some credit cards include travel insurance among their perks. Insurance coverage can vary, but it might cover delayed flights, trip cancellations, emergency medical expenses, and lost luggage. Travel cards with such coverage often have annual fees, so it’s a good idea for consumers to weigh multiple options when selecting a credit card and insurance policies.

Whether you’re looking to build credit, apply for a new credit card, or save money with the cards you have, it’s important to understand the options that are best for you.

SoFi Travel has teamed up with Expedia to bring even more to your one-stop finance app, helping you book reservations — for flights, hotels, car rentals, and more — all in one place. SoFi Members also have exclusive access to premium savings, with 10% or more off on select hotels. Plus, earn unlimited 3%** cash back rewards when you book with your SoFi Unlimited 2% Credit Card through SoFi Travel.

FAQ

How do I know if my trip is covered?

Not every credit card offers travel insurance. Always read the fine print of your credit card before making travel insurance decisions ahead of and during your trip. If the legal jargon is confusing, you can typically contact a benefits administrator for clarification. Look at the back of your credit card to find the number.

What does travel insurance cover?

Every credit card travel insurance policy is different. Common coverages include trip cancellation or interruption, accident and medical, lost luggage, and even rental car insurance. Research your card’s policy ahead of your next vacation.

Will the expenses not charged to my card be covered?

Some credit cards with travel insurance require that you use those cards on travel expenses for the insurance to apply. Others may automatically apply certain types of coverage, like medical coverage, regardless of what card you used to book your trip. Reach out to your card’s benefits administrator before travel if you need help interpreting the travel insurance policy.

Photo credit: iStock/Atstock Productions

**Terms, and conditions apply: The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.

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The Automated Clearing House Network, or ACH, is a network that allows individuals and businesses to electronically move money between bank accounts — often within the same day. But sometimes things just don’t go according to plan, and those quick, convenient ACH payments wind up getting returned or needing to be reversed. Usually, these electronic transactions run smoothly, but at times, the funds don’t or can’t get from point A to point B.

Here, we’ll take a look at why ACH payments are sometimes returned. We’ll cover:

•   What ACH turns are

•   Terms to know about ACH returns

•   What the difference is between an ACH return and a Notice of Change

•   How to return an ACH payment

What Are ACH Returns?

While most ACH payments are likely to go through, ACH returns occur when an ACH payment fails to be completed. This can happen for a few reasons, such as:

•   The originator providing inaccurate payment information or data

•   The originator providing non-existent or inadequate authorization

•   The originator isn’t authorized to debit the client’s account with an ACH payment

•   Insufficient funds to cover the transaction (which can happen, especially if the person paying doesn’t balance their bank account regularly)

Next, let’s look at how an ACH return transpires. If a merchant wants to debit their customer’s or client’s account, the merchant’s bank (at the merchant’s request) will send a request for an ACH debit from the customer’s account. The customer’s relevant ACH network will then receive an ACH payment request. Then the merchant’s bank will debit the customer’s account and the merchant’s account will be credited with the amount of money indicated in the ACH payment request.

If for some reason the customer’s bank account alerts the ACH network that they are not able to complete the transaction, the money will remain in the customer’s account. That’s an ACH return.

It costs money to process an ACH return, and that cost generally falls on the consumer. Similar to how consumers get charged a fee when they bounce a check, the consumer will typically need to pay a fee if an ACH return occurs. This bank fee is fairly small and typically only costs $2 to $5 per return.

Important Terms to Know About ACH Returns

To better understand how ACH returns work, it’s helpful to know a bit of the industry’s vocabulary — particularly ODFI and RDFI (which are the two parties involved in every ACH return). Here’s what these acronyms mean:

•   ODFI (Originating Depository Financial Institution): The originator of the transaction who’ll send funds

•   RDFI (Receiving Depository Financial Institution): The receiver of the funds

Another facet of ACH lingo that’s helpful to know are ACH return codes. Any ACH return that occurs will generate an ACH return code. These ACH return codes are made up of the letter R followed by some numerals. Each code represents a different reason for a return. These codes can be helpful because they inform the originator of why the ACH return happened.

The following ACH return codes are fairly common:

•   R01 – Insufficient funds. This code means that the available assets can’t cover the debit entry (like when an account is overdrawn).

•   R02 – Account closed. In other words, the client or the RDFI closed the account that should be debited or credited through an ACH payment.

•   R03 – No account/unable to locate account. In this case, the return occurred because the account intended for ACH payment doesn’t exist or the account’s owner is not the one noted by the debit entry.

•   R04 – Invalid account number structure. If something is wrong with the client’s bank account number or the number doesn’t pass validation, a R04 return code results.

•   R05 – Unauthorized debit to a consumer account. If the receiver hasn’t authorized the originator to request an ACH transfer from their bank account, the transfer can be blocked, and this ACH code will occur.

It’s worth noting that R05 return codes work a bit differently. Unlike the other ACH return codes listed, the return time frame for R05 is 60 banking days instead of two. This longer time frame gives the originator a chance to ask the receiver to allow the ACH transfer to occur or to provide them with a new bank account number to complete the transaction.

Recommended: Routing Number vs Account Number: How to Find Both

What Is the Difference Between a Notice of Change (NOC) And ACH Return?

It’s easy to confuse a Notice of Change (NOC) and an ACH return, but these are two different things. An NOC is a method used by financial institutions to notify a federal agency to correct or change account information. It applies to an entry processed by the federal agency through the ACH. A NOC is not a form of payment in and of itself. Nor does it represent a failure to complete an ACH payment transaction. It’s a request for an edit, basically, while an ACH return actually stops a transaction.

Recommended: How to Transfer Money From One Bank to Another

When Can You Request a Reversal of an ACH Payment?

For a reversal to occur on an ACH payment, certain requirements have to be met. Here are the guidelines for successfully putting the brakes on a transaction:

•   The reversal entry has to be transmitted to the bank within five banking days after the settlement date of the erroneous file.

•   Transmitting the reversing file has to occur within 24 hours of discovering the error.

If these criteria are met, the reversal of an ACH payment can proceed.

Why You Might Be Receiving an ACH Return

As you monitor your bank account, you may see that an ACH transaction, which usually happens so smoothly, is being returned. This can occur for a variety of reasons. For instance, the originator may have provided inaccurate payment information or may not have been authorized to debit the customer’s or client’s account with an ACH payment. The codes reviewed above can also shed light on why the transfer of funds was stopped. By the way, both returned mobile ACH payments and returned ACH card payments can occur.

How to Return an ACH Payment

Account holders and merchants who encounter issues with ACH payments can stop or reverse them.

If you may need to delay or adjust an ACH debit (which is an automatic “pull” from your account) as a consumer, you’ll want to contact the organization that is initiating the payment, whether this is the biller or your bank. If it is your bank, you’ll need to give them the name of the business or organization that is making the ACH debit and the amount. Ideally, you want to do this three business days before the scheduled payment date.

If you want to stop an ACH credit, which is when your bank “pulls” money from someone else’s account, you will need to notify your bank before the payment is debited. You will typically need to provide the name of the person or business that is paying you, the exact payment amount, and your account details.

The Takeaway

While ACH payments are a convenient payment method, sometimes a funds transfer fails to go through. In this situation, a returned ACH payment occurs. ACH returns can happen for a few reasons (such as the client’s bank account contains insufficient funds to complete the transfer). The entire process is fairly quick and is usually completed within two banking days. As more and more electronic transfers happen, it’s wise to be aware of this system that can step in if details are incorrect or one party can’t or won’t hold up their end of the arrangement.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

What’s the time frame for an ACH debit return?

It usually takes two banking days for an ACH return to complete. However, there are select ACH return codes that result in a 60-day return period.

How much are ACH return fees?

Fees vary, but they usually cost about $2 to $5 per return. The consumer pays this charge. It’s similar to paying a fee for a bounced check.

What are ACH return codes?

Every time an ACH return happens, the originator will be sent an ACH return code. This code is represented by the letter R and a two-figure number and explains why the return happened. For example, a R01 return code indicates that the client’s bank account contains insufficient funds to complete the transfer.

Can returned ACH payments be disputed?

Yes, ACH returns can be disputed. What that process looks like varies with the reason why the ACH return occurred. Every ACH return code has a specific return time frame associated with it. Generally, the client needs to dispute the ACH return during that time frame.

Photo credit: iStock/Nicola Katie

SoFi members with direct deposit activity can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. Direct Deposit means a recurring deposit of regular income to an account holder’s SoFi Checking or Savings account, including payroll, pension, or government benefit payments (e.g., Social Security), made by the account holder’s employer, payroll or benefits provider or government agency (“Direct Deposit”) via the Automated Clearing House (“ACH”) Network during a 30-day Evaluation Period (as defined below). Deposits that are not from an employer or government agency, including but not limited to check deposits, peer-to-peer transfers (e.g., transfers from PayPal, Venmo, etc.), merchant transactions (e.g., transactions from PayPal, Stripe, Square, etc.), and bank ACH funds transfers and wire transfers from external accounts, or are non-recurring in nature (e.g., IRS tax refunds), do not constitute Direct Deposit activity. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. SoFi members with direct deposit are eligible for other SoFi Plus benefits.

As an alternative to direct deposit, SoFi members with Qualifying Deposits can earn 4.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Qualifying Deposits means one or more deposits that, in the aggregate, are equal to or greater than $5,000 to an account holder’s SoFi Checking and Savings account (“Qualifying Deposits”) during a 30-day Evaluation Period (as defined below). Qualifying Deposits only include those deposits from the following eligible sources: (i) ACH transfers, (ii) inbound wire transfers, (iii) peer-to-peer transfers (i.e., external transfers from PayPal, Venmo, etc. and internal peer-to-peer transfers from a SoFi account belonging to another account holder), (iv) check deposits, (v) instant funding to your SoFi Bank Debit Card, (vi) push payments to your SoFi Bank Debit Card, and (vii) cash deposits. Qualifying Deposits do not include: (i) transfers between an account holder’s Checking account, Savings account, and/or Vaults; (ii) interest payments; (iii) bonuses issued by SoFi Bank or its affiliates; or (iv) credits, reversals, and refunds from SoFi Bank, N.A. (“SoFi Bank”) or from a merchant. SoFi members with Qualifying Deposits are not eligible for other SoFi Plus benefits.

SoFi Bank shall, in its sole discretion, assess each account holder’s Direct Deposit activity and Qualifying Deposits throughout each 30-Day Evaluation Period to determine the applicability of rates and may request additional documentation for verification of eligibility. The 30-Day Evaluation Period refers to the “Start Date” and “End Date” set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the “30-Day Evaluation Period”). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY. Upon receiving a Direct Deposit or $5,000 in Qualifying Deposits to your account, you will begin earning 4.00% APY on savings balances (including Vaults) and 0.50% on checking balances on or before the following calendar day. You will continue to earn these APYs for (i) the remainder of the current 30-Day Evaluation Period and through the end of the subsequent 30-Day Evaluation Period and (ii) any following 30-day Evaluation Periods during which SoFi Bank determines you to have Direct Deposit activity or $5,000 in Qualifying Deposits without interruption.

SoFi Bank reserves the right to grant a grace period to account holders following a change in Direct Deposit activity or Qualifying Deposits activity before adjusting rates. If SoFi Bank grants you a grace period, the dates for such grace period will be reflected on the APY Details page of your account. If SoFi Bank determines that you did not have Direct Deposit activity or $5,000 in Qualifying Deposits during the current 30-day Evaluation Period and, if applicable, the grace period, then you will begin earning the rates earned by account holders without either Direct Deposit or Qualifying Deposits until you have Direct Deposit activity or $5,000 in Qualifying Deposits in a subsequent 30-Day Evaluation Period. For the avoidance of doubt, an account holder with both Direct Deposit activity and Qualifying Deposits will earn the rates earned by account holders with Direct Deposit.

Members without either Direct Deposit activity or Qualifying Deposits, as determined by SoFi Bank, during a 30-Day Evaluation Period and, if applicable, the grace period, will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances.

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