Credit Insurance Phoenix AZ
Tempe , AZ
Pheonix , AZ
Life Insurance Services
Credit Card Protection Insurance- Should You Get It?
When sorting through various files regarding credit cards, many people may happen upon information regarding credit insurance. In fact, many people may be paying for this insurance and not even realize that they have it. Not a good idea—fees can sometimes be as high as $25 to $30 a month.
What is credit insurance?
In a time when credit card debt is at an all-time high—up to $500 billion last year—many people turn to credit card insurance for a little security. Consumer Reports reveals that yearly sales of credit insurance total $6 billion.
Credit insurance is a type of coverage designed to pay off the minimum monthly payment in the event that a credit user cannot make their payments. Credit insurance is offered more and more, so if you haven’t heard of it yet, chances are that you will. It is offered by credit card companies, banks, stores, car dealers…the list goes on.
The average rate of credit insurance is around 75 cents for each $100 of loan coverage per month. This means that if you carry a monthly balance of $3000, the insurance premium would cost you around $22 each month. That may not seem like a lot, but small sums add up: $22 dollars a month costs you $264 a year.
There are several types of credit insurance:
A typical credit insurance policy offers:
The key thing to remember is what most insurance offers don’t eagerly highlight: most coverage pays only the minimum monthly payment each month.
So is credit insurance worth the fee?
A strong debate exists regarding credit insurance. Supporters of credit insurance (usually those who offer it) say that it offers great protection for some credit users. For instance, a consumer who carries a large debt and who is in poor health may definitely benefit from the advantages of credit insurance should they become too ill to work.
Critics argue that it’s a grand money maker for companies that offer the insurance, but a bad deal for consumers. They make a case that a life insurance policy would cost the consumer less and pay out more benefits. Indeed, the Consumer Credit Insurance Association notes that...