Home Credit Card Credit Card Payment Insurance

Credit Card Payment Insurance

1058
0

Money Monitor 20130103Many credit card companies offer insurance that can help to protect your credit rating by making the minimum payments to the credit card in situations such as the card holder is unable to work due to an illness, or the cardholder suddenly loses their jobs.

How are the premiums calculated for this type of insurance? In most cases, the higher that the balance is on the credit card, the higher that the payment will be towards the monthly premium. This is because there is often a base charge of a specific amount of money for each hundred dollars that has been racked up using the credit card.

Many consumers wonder about the validity of credit card payment insurance. Is it truly worth the costs that must be paid on a monthly basis just in case something was to happen to you? It is important to take into account the following factors when you are making the choice to use credit card payment protection insurance:

  • Do you carry a high balance on the credit card? If you indeed carry a high balance on the credit card than the monthly payments that you are making could go a long way towards the balance of the credit card.
  • How much is your minimum payment each month for the balance that has been accrued? If something were to happen to you, would you be able to find room within the budget to accommodate this monthly payment?
  • If you do not carry a balance regularly on a credit card than these payments might as well be thrown down the drain. The balance protection services are for those with high monthly payments that may be unable to make these payments in the case of an emergency.

There are some credit card companies that automatically charge this balance and enrollment into the program is mandatory. This is an important question to ask upon applying for the credit card, as it could cost you hundreds and even thousands of dollars through the life of the credit card – in money that you may never require access to.

As well, there are often many stipulations and regulations that come with having a credit card that offers payment protection insurance. There are often very few cases that the payment insurance can be used and it can take weeks to apply for and learn of the eligibility of circumstances to receive the funding for the credit card. If this takes too long, the credit report and the credit score will suffer and reflect this missed payment.

It is important to scrutinize any financial service, especially those that are associated with credit cards. This will ensure you are getting the best rate and saving the most money in the long run. Never agree to a financial service, such as this without having all of the information that is available.

 

Share