If you are one of the millions who rely on credit cards on a regular basis then you should consider taking out credit card payment protection insurance. Many individuals solely rely on their credit card to fall back onto to pay all the unexpected bills that crop up from time to time. Others rely on them from month to month to make their income stretch out that little bit further. Others use them on an almost daily basis for just about any payments they have to make and then pay the credit card bill out of their income at the end of the month. However you choose to use your card some thought should be given to protecting the repayments of it in case you lose your income to accident sickness or unemployment.
One of the cheapest ways to take out credit card payment protection insurance is with an independent provider. By taking out your policy this way you can compare the cost of the insurance and also compare the terms offered as these differ. At the same time you can check the exclusions against your circumstances so you could be sure of being eligible to make a claim. You would insure a percentage of the outstanding monthly balance on your credit card against the possibility that you could become unemployed or incapacitated. The provider would pre-agree to this amount and if you should need to make a claim you would get this amount back to use towards your monthly credit card bill. You could claim between the 30th and 90th day depending on the provider and could claim for either 12 or 24 months again depending on the provider.
If you were to be unable to meet your bill the lender could take you to court and this would affect your credit card score. You could end up with a County Court Judgement against your name and this would affect future borrowing. In the worst case scenario a judge could send bailiffs into your home to take your possessions so the lender can sell them to get back what you owe on your credit card.
Credit card payment protection insurance could stop any of this from happening and when taken with an independent payment protection specialist it does not have to cost a fortune. The lender will usually try to get you to take out protection when you take on the card. However in the majority of cases this would be the dearest way of covering your credit card repayments. In some cases in the past protection has been added onto the credit card when taking it out without consumers knowing what they were taking on and this has led to cover being mis-sold. Soon this will change when new rulings come into force which will see a ban on cover being included in with credit agreements. Instead the lender has to wait 7 days before then contacting the consumer to see if they want protection.
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