Choosing a credit card from the hundreds of different products available can be tough enough, but fending off credit card companies when they start offering you extra products like insurance can leave you without a clue what to do for the best.
Should you get insurance when you take out a credit card? If so, should you take out a policy at the same time as get your credit card or should you look elsewhere for credit card insurance? Before deciding whether you need it or not, it can be useful to know about the different types of insurance for credit cards that are available to you.
Card protection insurance
Card protection insurance is a policy that simply covers you in case your credit card gets lost or is stolen and you suffer a financial loss as a victim of credit card fraud. You might find such a policy useful, but you might not need it at all. According to the consumer group Which?, there are rules in place stating that banks must reimburse victims of credit card fraud and identity theft.
Payment protection insurance
The second type of insurance you can get when you have a credit card is payment protection insurance, a type of cover you might have heard a lot about recently. Payment protection insurance, or PPI, is a policy that covers your repayments on your credit card if you fall ill, become injured or can’t work and earn money for some reason. There are exemptions to these policies (i.e. you aren’t covered if you get sacked from your job), but if you are worried about falling behind with your payments if the worst should happen, PPI can be a useful policy to have. PPI has been in the news a lot recently due to widespread mis-selling, where customers were sold it when applying for loans and credit cards without knowing they were being sold it. As long as you want PPI and are told all about the terms and conditions of the policy, you won’t be a victim of PPI mis-selling and you could actually end up with a very useful type of insurance cover.
When and where to buy credit card insurance
When deciding whether or not to take out the insurance offered at the same time you apply for credit card or other financial products, there is one simple thing to ask yourself – is it the best deal? It may be more convenient to get two products at once, but there is a good chance you could get your credit card insurance cheaper if you shop around a bit.
May 17, 2013 – 12:58 PM - | Posted in Uncategorized | No Comments »