Credit card payment protection can be taken to insure your credit card repayments against the possibility that you might become unemployed or incapacitated. You would insure a percentage of the monthly outstanding balance on the credit card and then claim this sum back, tax-free if you suffered redundancy or became a victim of accident or sickness.
The sum of money from credit card payment protection would then be there for you if you if you did lose your income and would go a long way towards you being able to continue meeting your repayments. If you could not and you were to fall behind the lender might take you to court to seek back what you owe. You would also see your credit rating affected and this means that you would have a great deal of trouble obtaining credit of any kind in the future. If you did manage to get approval for credit you might have to pay well over the odds for the rate of interest.
You would get a policy a lot cheaper if you choose to shop around for the protection independently rather than taking the cover that is offered when you take out the credit card. High street lenders make around £4 billion in profits by adding in cover with their products. One of the cheapest quotes will come with independent payment protection specialist British Insurance. You will get cover that comes with few exclusions and British Insurance makes you aware of these by providing you with the information needed for you to check them against your circumstances.
You would also buy a policy that comes with no excess as it would be dated back to the first day of your unemployment or incapacity. You could claim after the 30th day and then receive an income each month for up to 12 months. If you looked with other providers you would have to check when the cover would begin as some policies might state that you have to be unemployed or incapacitated for at least 90 days. You also need to check how long it would continue to provide you with an income for as some providers will payout for up to 24 months.
Credit card payment protection is a better form of safety net than relying on being eligible to claim State benefits. Very often even if you are entitled to receive benefit from the State the money you would be entitled to receive often falls short of the income you are used to bringing home. If you are going to rely on savings you could also be let down as you would not know how long you would have to turn to savings to continue meeting your credit card repayments.
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