Credit card payment protection allows the policy holder to secure a percentage of their monthly outstanding balance on their credit card. Protection can be taken at the same time as taking the card with the lender or you could search around for cover independently with a specialist provider. If you choose to search with a specialist then you have a great deal more control over your policy and you make some of the biggest savings on the insurance.

By choosing the percentage of your monthly outstanding credit card balance to protect you can keep down the cost of the insurance as this goes towards determining the premiums. Your chosen amount would have to be pre-agreed with the provider as of course this is the amount of money that you would receive back towards meeting the outstanding balance on your card each month. You would be able to make a claim on the insurance once you had been unemployed or incapacitated for a certain period of time and this is generally between the 30th and the 90th day. Some providers will date back the benefit to the first day that you lost your income to unemployment or incapacity and this would have to be checked in the small print before taking on the protection. Once credit card payment protection has begun to provide you with an income it would then continue to do so by providing you with either 12 months repayments or 24 monthly repayments. After this amount of time it would then cease regardless of whether you had managed to find work or had made a recovery and got back to work.

You could choose the level of protection to suit your needs as you might not need to take unemployment and incapacity protection together, which means that you only pay out for the protection you want. If unemployment protection would suit your lifestyle better then you could just choose to take this as a standalone policy. However you could just need to protect against the possibility of incapacity alone and this is possible with the independent provider. Other factors that are taken into account include your age. The younger you are when applying for the protection the cheaper you will get your cover. Age based protection this way means a policy is affordable for the younger generation who often push their outgoings to the maximum which leaves little left over for taking out what is often very expensive payment protection.

Being able to keep up with the balance of your credit card is essential because it can soon build up to an enormous sum of money that is owed and you might not even be able to make the minimum amount of the repayment. If this happens then of course you would not be able to rely on being able to turn to the card if needed. Your credit rating would also be affected and this means that any credit application that you apply for in the future could be turned down. Credit card payment protection could help to put a stop to this happening.

When considering covering your monthly outstanding credit card balance you should check out the benefits of credit card payment protection online. Of course if you are considering a policy then you will already know of the biggest benefit, the income it supplies towards meeting the monthly outstanding balance of your credit card if you lose your own income. A lost income could come about through redundancy or incapacity through accident and sickness. If you were unlucky enough to become a victim to one of these events and did not have anything to fall back onto, you could have quite a struggle to find your repayment which could see you falling into debt and having to face the consequences.

When looking into taking cover you should realise that you have the option of shopping around for the cover with an independent provider. Lenders will generally ask if you want protection when you take on the card, in some cases it could be included without you even knowing. If you choose to take your credit card payment protection with an independent provider you can choose the percentage of your outstanding monthly credit card balance you want to protect. This is then the amount you would be given back towards meeting your repayment each month if you suffer from one of the events insured against. The income is paid back to you once you have been unemployed or incapacitated for a period of between 30 and 90 days depending on the provider you choose to take your protection with. Once payments have begun you then have between 12 months and 24 months in which to search around and find work or to make a recovery and then cover ceases.

With credit card payment protection to rely on you would have a substantial sum of money towards being able to maintain your credit card repayment each month. You would not be left struggling to find the whole sum of money each month for the repayments which could bring a great deal more stress into an already stressful situation. Nor would you have to juggle around with bills and what little money you had coming in, such as sick pay, in order to be able to keep on top of all your outgoings which include your credit card repayments.

While you can choose to take out credit card payment protection to protect against both unemployment caused by redundancy and incapacity brought about through accident and sickness you might not need to protect both events. If this is the case then you could choose the amount of protection you want based on your lifestyle. If you get a substantial sum of sick pay then you might just want to protect against the possibility of losing your income to redundancy. Alternatively you might just need to protect your repayments against the possibility of being unable to work after suffering from an accident or an illness. The level of protection, your age and the percentage of your credit card balance insured would all go towards determining the premium you pay each month for the cover.

Credit card payment protection can be taken out for your peace of mind and security. You can choose your provider if you shop around with independent providers and compare cover online which will lead you to the cheapest premiums.

Credit card payment protection is taken out by you insuring a percentage of the monthly outstanding balance on your credit card against losing your income to sickness, accident or unemployment. You would have to stand to a certain amount of time of being unemployed or incapacitated before making a claim and payments would continue for a period before then ceasing. Usually a claim can be made between day 30 and 90 of your unemployment or incapacity and payments would continue for either 12 or 24 months, again depending on the provider you choose to take your protection with. After the term of the cover has reached its end it would simply cease paying out. However as you would have a large amount towards meeting your repayment each month it would bring peace of mind which allows you to concentrate on recovering or finding work.

A loss of income could mean that it would be impossible to pay your credit card balance when it became due and if this should happen the lender could take you to court if you fall behind. When this happens your credit rating would be affected and as this is one of the main things taken into account when you apply for any type of credit you could be turned down. Of course you would also have to find a way to repay your debt; otherwise the lender could take you to court to claim back the money you owe. In some cases the judge could send bailiffs into your home to seize your belongings to sell them so the lender could get back some, if not all, of what you owe.

Credit card payment protection can be offered by the lender you take your card with, however this can cost you a great deal more than the premiums offered by standalone providers. When taking out the card always look into whether protection has been included, some lenders have in the past been known to add in protection without you knowing. As a result credit card cover has in the past been mis-sold due to the exclusions which reside in all forms of payment protection. These need checking against your lifestyle to ensure suitability. Following an investigation by the Financial Services Authority and the Office of Fair Trading fines were handed out. The Competition Commission have also been conducting an in-depth review and changes will soon be seen in the way that cover is sold. Lenders will be banned from selling protection at the same time as their credit agreements and will instead have to wait for a 7 day period. They will also have to make it known that protection can be taken out independently.

Credit cards have taken over from cash and cheques for a lot of people – especially internet shoppers, but few of stop to think how we would meet the monthly bills, which is where credit card payment protection comes in.

Payment protection for your cards will pay a part of your credit card balance each month if you lose your job or can’t work from sickness or injury.

No doubt your credit card provider offered payment protection when you agreed to take the card, but if you have this insurance you could be paying way over the odds.

Many independent insurance companies offer the same or better cover at cheaper rates than credit card providers
Credit card payment protection gives short-term support that allows you to get back on your financial feet if you are made redundant or can’t work.

Of course, like lots of insurance, the policies come with exclusions and conditions.

For instance, unemployment cover only protects you if you lose your job through no fault of your own. The insurer won’t pay out if you resign, get sacked, take voluntary redundancy or retire.

Sickness and accident cover are unlikely to cover you for any pre-existing conditions you suffered from prior to the start of your policy.

To apply for cover, you need to meet certain criteria, generally be aged between 18 and 65 years old, work more than 16 hours a week and your home and job should be in the UK.

Policies usually have a qualifying period of 30 – 120 days before a claim is allowed.

Once your claim is accepted, a regular payment is made to your card company each month as a percentage of the outstanding balance. This ensures you don’t miss any payments that might lead to further financial hardship and keeps your credit rating intact.

These payments last until you return to work, or for 12 to 24 months, whichever is the earlier. Again the number of payouts depends on the insurer’s policy conditions.

Many companies make it a condition that you don’t use the card during the claim period so the balance does not increase.

For costs, you need to talk directly to a company offering credit card protection. Generally, they are calculated as an amount per £100 of cover with some insurers setting a £5,000 top limit on the balance they will cover.

All these variations between insurers highlight the importance of shopping around for cover that’s right for you.

You might cut the cost of credit card payment protection by agreeing a deferment period of several weeks before the company makes a payment. In this time, you would meet the credit card bills yourself.

Having a credit card for most people means access to extra cash to pay for everyday items even utility bills. Having access to the extra money does not preclude you from paying the bill though and once you have income coming in that is fine. But if you were to lose your regular income how will you maintain your credit card bill. Well that is where credit card payment protection comes in.

This policy will help you if you were to lose all or part of your income. It will pay a specified percentage of your credit card balance until you return to work after an illness or accident or until you find alternative employment in the case of unforeseen involuntary redundancy.

Main Features
The payment from a credit card payment protection policy will last for around 12 or 24 months subject to the provider terms. If you were to return to work within the specified period then the payments will end.

Although these policies are not medically underwritten which makes the set up and administration more straight forward, getting a policy is not automatic. You will need to meet the provider’s minimum employment period which can be a minimum of six months.

There are eligibility criteria to meet and once you do get your policy if you wanted to make a claim you will need to wait out the deferment period as set by the provider.

Credit card payment protection premiums are normally based on the balance of your credit card. As an example for every £100 you have outstanding the premium will be a set amount, say £1.65 per £100.

This is useful to know if you are evaluating different policies based on the premiums. Generally if you look at independent providers you will get the lowest premiums on the market.

Independent companies like British Insurance can save you up to 80% in premiums for named protection policies.

Benefits Include
Peace of mind. Once you have card protection in place you won’t have to worry about messing up your credit profile because of missed payments. If you are on your sickbed you can concentrate on getting better not worrying about red letters or creditors calling.

The financial payment will take the stress away as your credit card bill will be maintained without any missed payments.

Summary
Having credit card payment protection is a sure way of keeping your credit card bills under control if you are unable to make your payments. The premiums are not very high if you know where to shop and the peace of mind it provides will be priceless especially if you are concerned about keeping a clean credit profile if you lost all or part of your income.

Whether it is used to fund an expensive hi fi system or used to pay for a grocery shop, the credit card is a useful tool for many consumers. However, unless someone is on a temporary interest free deal, the loan is not free and the provider will expect to earn a profit through charging you interest. Rates vary, but just about any card has the potential to get out of control if someone suddenly finds they are unable to pay back the debt. Even more frustrating is when someone cannot pay through no fault of their own, although there is a form of cover called credit card payment protection which can help guard against this.

If someone ends up without a salary due to a long-term illness or injury, the credit card company will not simply waiver the debt and allow someone to go without paying. Likewise, those who are made redundant involuntarily can also expect to still have to pay their bills. Credit card payment protection will provide cover for both of these eventualities, meaning someone can protect their ability to pay back the card company when they are in a tight spot they have not caused themselves. The added bonus to this is that it can help protect someone’s credit rating, which is ever more important when it comes to the modern borrowing market.

This type of insurance requires a regular premium, in exchange for which the insurer will pay a set percentage of someone’s outstanding card balance if they cannot pay due to no fault of their own. The designation of ‘no fault of their own’ is normally quite strict, and simply means if someone is left without an income because they are ill long-term, have suffered an injury following an accident, or are out of work involuntarily through redundancy.

Common exclusions mean someone can unsurprisingly not claim if they are ill for self inflicted reasons, i.e. alcohol or drug abuse. Likewise those who have voluntarily taken redundancy will not be able to claim on their policies.

The insurance typically works by paying a percentage of someone’s outstanding balance, and this can normally be agreed when the policy is taken out. So someone may decide to protect 10 per cent of what they owe, which would mean if someone owed £200 on their card after making a claim, the first payment by the insurer would be for £20. It is safe to expect that a policy will at least pay the minimum required amount per month.

When it comes to the cost of credit card payment protection, some will offer a deal whereby you are charged a percentage of the outstanding balance. So if you have a policy which incurs a nine per cent fee, and you had £100 outstanding, your premium that month would be £9. This type of insurance will be offered by credit card companies themselves, but it can pay to shop around with more independent providers who may be able to offer a better deal, such as payment protection specialists British Insurance.

Credit card payment protection provides money towards your repayments if you find yourself the victim of redundancy or unemployment. You would be able to insure a percentage of the outstanding monthly balance on your credit card which the provider would pre-agree to you insuring, against the possibility of becoming unemployed or incapacitated.

Before claiming you need to stand to a period of time of unemployment or incapacity. This would depend on the provider as would how long the policy would payout. If you take a look at the credit card payment protection that is offered by independent provider British Insurance a claim can be put in once you have been redundant or incapacitated for 30 days. British Insurance back date your benefit to the first day that you became unemployed or unable to work and they then continue to provide an income for up to 12 months. This time can be long enough for you to have made a recovery and got back to earning your own living. It could also provide you with enough time to have searched around for work and found another job.

If you chose to shop around and compare credit card payment protection with other providers then remember to check out the small print of the cover. There are providers that could offer a policy that would continue to payout for up to 24 months. Some providers might also state that you have to wait up to 90 days before putting in a claim. Exclusions can also be found in the terms and conditions so check these too. Ethical standalone specialist British Insurance includes the most common ones, but other providers could include many more. It is only by checking the exclusions against your lifestyle that you can be sure of being eligible to make a claim.

Falling behind on the repayments of your credit card can lead to the lender choosing to take you to court. This can mean you would gain a County Court Judgement which of course would be a black mark on your good name. At the same time missed payments would be recorded on your credit file. Your credit file is one of the main factors taken into account whenever you apply for credit of any kind. Whether you are apply for a car loan, a mortgage or something as simple as wanting to change your monthly mobile phone contract, your rating would be looked at by the lender. If yours if showing that you have missed payments and you owe money you cannot afford to repay, it is highly unlikely you would get approval. A bad credit rating can also take a long time to repair. Credit card payment protection would go a long way towards you ensuring you would have money towards maintaining your repayments so you would not have this worry.

If you have credit cards then you no doubt find them useful for paying for many items from groceries to cinema tickets. You might be in a position where you pay the minimum monthly balance or perhaps you make regular repayments of a specified amount. Have you considered how you will continue to make these payments if you lost your regular income?
Well, if you take out credit card payment protection you won’t have this worry at all.

The policy will help you by paying a set percentage of your credit card balance when you can’t afford to. The policy is only designed to pay out in certain events for example if you were made redundant or had an accident or illness you could qualify for payment of the benefits.

You should note that the policy will not pay out if you chose a redundancy package or if you knew about the redundancy in advance.

Features
Credit card payment protection will not last forever; the benefit period is usually around 12 or 24 months depending on the provider terms. If you were to return to work within that period the payments will simply cease.

In order to own a policy you may need to meet specific entry requirements with regards to age, number of hours worked per week, type of employment etc. You should check these with your potential provider so you don’t end up purchasing a policy that you could never claim on.

Once you own a policy there may be a deferment period of 30 – 90 days before you can make a claim and once your claim is successful the benefit will be paid but this amount will not cover your entire salaried income.

Premiums are usually calculated based on your balance so you may pay £1.70 per £100 of your outstanding balance just as an example. Your provider will have more specifics on the cost of premiums.

If you want to access the most competitive premiums you might want to obtain quotes from independent providers. Companies such as British Insurance can offer up to 80% savings on certain protection products

Main Benefits
Credit card payment protection can provide you with peace of mind and this is probably the best benefit. While you are employed you don’t have to restrict your lifestyle due to fear of job loss. If the worse did happen you will have a way of maintaining your credit card payments.

In addition, you can maintain your credit profile while unemployed or recovering. Thanks to the monthly payments to your card, there will be no evidence of a missed payment.

Conclusion
If you have a credit card balance and you rely only on your salaried income to pay it, then credit card payment protection is very relevant. It will provide the income you need to keep up your payments until you begin earning a full salaried income once again.

Credit card payment protection could help to secure your repayments if you lost your income through falling ill, suffering an accident or if you became unemployed as the result of redundancy. You would be able to insure a percentage of the monthly outstanding balance on the credit card against these events and this is the amount you claim back if you fall victim to one of these events.

The income could make a huge difference to your lifestyle as it would provide peace of mind that you did at least have some money coming in towards meeting your repayments. However you would have to wait for the deferment period stated by the provider before you would be able to make a claim on the insurance policy. This period of time would depend on the provider you chose to take out your policy with. Leading protection provider British Insurance offers cover that could be claimed upon after the 30th day. Your policy would then continue to provide your income for a maximum of 12 months before expiring.

When shopping around and comparing credit card payment protection with other specialist providers, you would need to check the terms and conditions. Some providers could state a deferment period of up to as long as the 90th day after the covered event. You might also be offered 24 months cover with some providers and the exclusions could vary with all providers. Ethical provider British Insurance adds in the most common one and they provide the information needed so that you are able to check these against your circumstances. Other providers however could include many more in their policy. It is imperative that these are checked so that you would have peace of mind that cover would work for you.

Without credit card payment protection to fall back onto you could have a huge struggle on your hands to find the money. If you should fall behind on your repayments you would of course have to catch up on them and the lender could take you to court to seek the money back which means you could gain a CCJ against you. Your credit rating would also be affected and it is imperative that you maintain this if you should want to borrow again in the future. Your credit rating is one of the factors that will be taken into account whenever you put in an application for any type of credit. If your rating has been affected by late or missed payments or you are in debt then you could be turned down. While the policy might not payout the full repayment on your credit card it would at least pay a substantial sum towards keeping you out of debt.

You may think that credit card payment protection insurance is just another unnecessary product that you will never need. However, you may actually be confused as to what credit card protection insurance is. For the purpose of this article we are talking the insurance that protects the repayments on your credit card in the vent of job loss or loss of income due to accident to sickness.

We are not talking about the type of insurance that protects your card in the event it is lost or stolen.
Maybe you were unaware that you could protect the repayments on your credit card? Certainly, it is an exciting concept, that even if you were made redundant or were off work due to accident or sickness, you would still be able to comfortably service your debts.

Because that is what credit card payment protection insurance does – it will pay you a pre-agreed amount (typically a percentage of your credit card balance) every month for 12-24 months until you are back to work again. This means no late or non-payment fees on your credit card, nor demands for unpaid instalments from the credit card provider.
The insurance will take away at least some of the financial worry that you will undoubtedly have at such an awful time.

So where to buy your credit card protection insurance?

You will be offered the credit card cover at the same time as you take out your credit card. However, this could well be the most expensive way of getting this protection. For the High Street banks and lenders, credit card insurance can be an easy way to make huge commissions. On the other hand, standalone providers historically offer the cover at much lower prices. One such specialist provider is British Insurance who can offer savings of up to 80% compared to the traditional credit card insurance providers.

What to look out for when buying your cover?

Apart from the price, check out the features and benefits of the cover. Look at the exclusions in particular to check that you would be eligible to take out a policy and claim. Typically, unemployment benefits will not be paid in the case of misconduct which contributes or leads to your dismissal nor resignation, voluntary unemployment or voluntary redundancy. And if your employment is seasonal or casual you will not be able to claim on your credit card payment protection policy.

Look to see when you are able to make a claim from as this varies among the different policy providers. It is usually anywhere from 30 to 90 days after the first day you are out of work or ill. Some providers - like British Insurance – backdate your claim to day one, meaning you don’t lose out financially.
So, now you know what credit card payment protection insurance is.