Do You Need Extra Protection for Your Credit Cards?February 2, 2011 - 8:35 am
When you apply for a credit card, the financial institution issuing the card may also offer additional options for you to purchase. A popular one being pushed is the credit card protection plans that are supposed to offer you additional coverage on your credit cards for a fee each month or annually. The real question consumers should be asking is whether or not such plans are worth it to them.
What Kind of Protection?
Various credit card protection plans offer different types of added protection. The key to deciding if any plan in particular is right for you involves reading the fine print. Some examples of coverage include disability protection in the event you are injured or ill and can not work or if you become unemployed through no fault of your own. Coverage for these situations will include interest not accruing on your account balances for a certain period of time. You also may be allowed to miss several months of payments during your situation depending on the plan specifics.
How Much Does It Cost?
Again, different cards offer different plans and fees vary. Typically, you are charged about fifty cents for every $100 you owe in balances. Some companies go as high as a dollar per every hundred dollars you have in balance totals. Essentially, the more you spend on the credit card, the more you end up paying in protection coverage fees. Additionally, the amount you must pay for coverage will be added on to your credit card’s monthly statement where it incurs fees and interest just as a purchase would.
How to Get Protection
If you are interested in additional protection plans for your credit card, you may have to check into the eligibility requirements from the card’s provider before opting in. Some cards will require you to meet eligibility standards. For instance, self-employed workers are typically not eligible for coverage due to job loss or medical illness. You may also fail to meet eligibility requirements if you are only employed part time. Take a look at the requirements for eligibility before opting to enroll in an additional protection plan. There is obviously no point in paying additional fees for something you can not even use to your advantage.
The decisions for adding a protection plan to your credit card is a personal one but you should know that all plans are not made the same and all plans do not accommodate the masses. Check with your current credit card provider and see if their protection plans are something to consider, something you can afford, and something you might actually use before enrolling in the program.
You should also check out consumer reviews of credit card protection plans that you are interested in. There have been many complaints issued by consumers who have found it difficult to collect on their claims through these credit card programs. Consumers often take to the Internet to voice their dissatisfaction with products and it may be worth a look to see what is really involved in opting in to protection plans.