Which is better?
There are advantages and disadvantages of both. Since the question is confined to Collision Damage Waiver the answer below will be limited to physical damage coverage concerns.
Choosing the Rental Car Company’s Collision Damage Waiver (CDW):
Advantages:
ALL costs associated with a physical damage claim are covered, including diminution of value charges.
No question of which party’s insurance will respond.
May avoid consequences with increased insurance rates following an accident.
No ($0) deductible applies.
Disadvantages:
Expensive
Using your Credit Card Coverage:
Advantages:
Less expensive - many times free (typically free when a qualifying card is used to purchase the rental car)
Disadvantages:
Not all credit cards include the benefit of coverage for physical damage to a rental car.
If your credit card includes coverage, it may be Primary, but is more likely Secondary to any auto insurance coverage you may have.
If card coverage is Secondary, your own insurance will respond first.
If your insurance responds first, a deductible will apply and surcharges could follow.
Most (if not all) credit cards will not pay for diminution of value claims.