Credit card protection insurance can give you the peace of mind that in the event you lose your income due to redundancy, illness or accident, you will have financial assistance with your monthly credit card repayments.
This insurance is a form of payment protection insurance and pays out a tax free sum every month should you become unable to work through no fault of your own. This helps keeps your monthly credit card commitments up to date and the wolves away from the door if you become a victim of unemployment or incapacity.
Credit card protection should not be confused with the type of credit card insurance that protects you should your card get lost or stolen. Credit card cover actually allows you to keep maintaining your credit card repayments even if you have lost your income.
Just some of the benefits of this cover mean that:
• You do not have to worry about finding the money to service your monthly credit card repayment;
• You will not find yourself facing charges and additional interest for late or missed payments;
• You will not damage your credit file;
• … which in turns mean that your chances of getting future credit will not be jeopardised.
A typical credit card insurance policy will pay you a benefit every month for up to 12 months – or until you get back to work if it is before the 12 months is up. Some providers will pay out for up to 24 months but obviously the cover will be more expensive.
How much benefit you will receive will be agreed at the time of taking out the credit card protection and this will usually be a percentage of your outstanding balance. The benefit will start to pay out usually around 30 to 90 days after you are incapacitated or made involuntarily unemployed, depending on the individual policy terms and conditions.
Look out for policies that are back dated to the first day of your claim, meaning that you don’t lose out.
The cost of credit card payment insurance need not be prohibitive. Historically it can be expensive when taken alongside your credit card from the same provider, but, as with most things in life, you are free to shop around for the cover.
Using a standalone provider such as the ethical British Insurance is among the cheapest ways of getting good value cover, without breaking the bank.
So, if you want the peace of mind that credit card protection can give you, it may pay to start shopping around for your cover now.
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