A Few More Diners Club Pros and Cons

The last couple of days I’ve been touting the Diners Club card.

This despite the fact that I own no stock in Citicorp, its parent (I sold too soon!), but do own stock in American Express, its competitor. And despite the fact that American Express, bless its heart, gave me a card my senior year in college. I’ve been a loyal “member” ever since, and plan to remain one.

The new Diners card is appealing. In addition to the plusses mentioned a couple of days ago, it provides $350,000 free flight insurance when you charge your tickets to the card, compared with $100,000 free from American Express.

Of course, this is kind of silly, because you only get to enjoy this benefit when you’re dead or dismembered . . . and because you’re not going to die on a scheduled airline — any more than you’re likely to be struck by lightning.

But you could be killed in the cab on the way to or from the airport — in New York or Moscow that is a very real possibility — so having this coverage can’t hurt, because it covers you in the cab, too. And, unlike Amex, it covers you when flying on free tickets.

(More details: lose sight in both eyes, you get the full $350,000. Likewise, an arm and a leg. One eye only: $175,000. One hand or foot: $87,500. But not cumulatively. And not if the accident was caused by an act of war, declared or undeclared, or suicide or attempted suicide while sane.)

Using the card to charge a rental car saves money, because you can decline the expensive collision waivers. If there’s an accident (or theft or fire), the Diners Club coverage should pay without your having to make a claim against your own auto insurance policy first. (Some restrictions apply to New York State residents.) That’s good, because making claims often leads to higher premiums. With Amex and others, your own insurance coverage has to be exhausted before the Amex coverage kicks in.

And then there’s “excess baggage insurance.” I’ve had some fun in years past writing about the coverage Amex sells. Well, the Diners Club coverage is not exactly something you need, either, but at least it’s free: $1,250 to supplement the airline’s own coverage. So if your $2,000 set of golf clubs is lost or stolen, you’d get the first $750 from the airline and the rest under this coverage.

The Diners card has its pitfalls. The first is late payment. They invite you to take a second month to pay, if need be, with no interest or penalty. Swell. But if you don’t, then you’re hit with a $20 fee plus 2.5% of the balance. Another not-so-good-deal is their cash advance program, that turns your Diners card into an ATM card — but with a 4% per transaction fee. Hey, it can take a year or more to earn 4% on your money, after tax. Why pay it to Diners Club parent Citicorp for having use of the money for a month or two?

The last thing to say about all this is that if I’m right, and Diners is offering a bit more than Amex these days, then one of two things is likely to happen fairly soon. Either Amex will up the level of its own benefits somewhat, or Diners will gradually lower its level (well, it’s already $15 more expensive: that pays for a ton of excess baggage insurance right there!). But for now, I guess Diners will be the top card on my deck.

I don’t know whether they’ll extend the 10,000-miles-free introductory offer to people who call them, but if you’re interested in learning more, call 800-2-DINERS.

Tomorrow: Stagnating Living Standards & Margaret Mitchell