Research by financial products research company, Defaqto, found that credit card providers are increasingly offering cardholders a range of benefits and rewards such as travel insurance, free warranty cover, cash back, lost luggage cover, shopping rewards and loyalty points with their card.

However, Defaqto claims that consumers often misunderstand the level of travel insurance benefit to which they are entitled and advises travellers that cover is normally only in place whilst travelling and not ‘in situ’ on holiday’. Medical cover and personal accident cover is generally only provided up to a certain amount, with over a third of credit cards offering personal accident cover of ‘between £50,000 to £99,999’.

Travel delay cover is offered by 79 per cent of cards and lost baggage cover, available with 71 per cent of credit cards. Two thirds of cards also provide free purchase protection, covering goods purchased using the credit card against loss, theft and accidental damage. Defaqto urges cardholders to check the terms, conditions and exclusions of the policy rather than be tempted by the promise of free cover.

Based on a comprehensive range of features (excluding price), every one of the 150 credit cards in the report was given a score based upon Defaqto’s Product DNA scoring system.

Mark Hayes-Newington, group commercial director of Defaqto, said: “When applying for a credit card, consumers should consider which provider’s features, benefits and charges are most suitable for them. It is crucial that consumers always read the small print before applying for a new credit card as many providers have convoluted terms, conditions and exclusions which are unclear in some marketing literature.”