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Take a pass on credit card insurance

Posted Oct 23 2007, 01:48 PM by Karen Datko
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Credit card balance-protection insurance may sound like a good deal: It will make payments on your credit card bill if you're laid off, disabled, seriously ill or -- dead. But how much  does it really pay? Blogger Nora Dunn at Wise Bread examines the fine print and informs us that the insurance will cover the minimum payment each month while interest on your balance continues to grow. You can probably do better on your own. The death benefit will pay your entire balance if a dirt nap is your fate, but term life insurance generally is a better deal.

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Comments

 

I learned a good lesson having insurance on my credit cards. I will never buy it again. Ms. Dunn is correct, they pay the minimum payment, they pay late and you have late payment fees because of it. Some of them don't pay at all. When I was injured at work, I had insurance on everything, only two credit card insurance companies out of eight paid. It is a never ending battle of paper work to prove your disability every 30  to 60 days depending on the company. Your credit cards go unpaid, your credit gets ruined , but of course it is our fault, not the credit card company, not the insurance company (consumers are expected to know the fine print, even though the companies do everything in their power to conceal it.) Do yourself a favor and cut your credit cards to shreds. They were designed to keep you in debt, to keep Americans in debt. A very sucessful plan.

Patsy K. Fields (Posted 01.27.08 5:17 PM ) Report Abuse

My financially irresponsible husband took a "dirt nap" when my kids were extremely young. Thank goodness he had anticipated a lay off and got the protection on 3 out of 8 credit cards- which saved me $8,000 because they paid at the time of his death.

I have an extraordinary situation, but it sure did come as a relief when those "paid in full" notices came in!

Janelle (Posted 02.05.08 6:17 AM ) Report Abuse

I really do think it depends on the credit card co on what kind of insurance it is and yes it is up to us as a consumer to read the fine print to make the call.

I know that when both of my parents passed they had cc insurance and they paid the accounts off no problem. To bad some people are not treated as well just makes the credit card companies look bad

Brenda (Posted 02.06.08 9:15 PM ) Report Abuse

Save the money you spend on cc insurance and in less than a year you will probably have more than enough to pay at least three months worth of min. payments...

This insurance is very expensive and not worth it! I try not to spend more than I can pay out of my savings and pay the balance every month... If you can do not carry a balance. I only use the cc to keep track of my spending and to get mileage.

ET (Posted 02.10.08 11:42 AM ) Report Abuse

Thanks for the post on this web about the insurance for the credit cards had I known better about the hight interest rates never would gotten in the easy credit card from the first beginning.

jacquelyn jones@peoplepc.com (Posted 03.20.08 3:56 PM ) Report Abuse

My mother took the "dirt nap" recently and had insurance on all of her cards. It def made things easier. The CC companies paid off the cards in full!!

Jesse (Posted 03.22.08 9:18 AM ) Report Abuse

I lost my full time job about a year ago when new management came in.  I immediately went out and got a new part time job to help fill some gaps while working on getting a new full time job.  At the time, I had insurance on 5 of my 10 credit cards - not a single one would let me utilize the benefits of the insurance because I had a part time job (regardless of the fact that the pay from my part time job barely covered 1/3 of my expenses).  Basically, unless you actually die, it seems like the credit card insurance is just a scam.  Saving up some money for unforseen financial problems seems like a much better plan than sending it off to credit card companies that may or may not deliver if you find yourself facing financial hardship.  

Steph (Posted 03.23.08 3:14 PM ) Report Abuse

To "the Evil Empire" of Banks, Credit Card Companies, and Insurance Companies the only "provable disability" IS DEATH!  THAT'S why everyone had "success" getting the accounts paid off after the death of parents, spouses, etc.  Ever tried to file a claim after an accident or injury in the workplace?  After they call you "lazy" or "faking" many companies it seems will fire you THEN try to saddle YOU with all of the bills!

The big companies know that they can get away with collecting the premiums then denying coverage because they have all of the politicians (of BOTH parties) and most of the Judiciary System in their pockets!  

Thanks for the advice--I have 2 cards currently and took the "protection plan" on one and refused it on the other and I will call and cancel the plan I do have today!

fedup (Posted 03.28.08 8:39 AM ) Report Abuse

I paid.  I was hit by a car and broke my pelvis.  My insurance claim was rejected.  

concerned citizen. (Posted 07.22.09 1:27 AM ) Report Abuse

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