Credit Card Insurance: Is It Worth It?
With
interest rates being what they are today, and some credit
cards charging higher rates than the average consumer wants
to pay, it doesn’t always seem that adding something else to
the bill is worthwhile. At the same time, a cardholder has
to look at the potential for needing the insurance. This, of
course, depends on the type of insurance that the card
issuer offers.
One of the things that tend to draw cardholders away from
credit card insurance is the cost, which is usually a
percentage of the unpaid balance at the time of the billing
cycle close. It tends to put up a red flag, and the
cardholder thinks it’s just another way for the card issuer
to get more money. They also see another way that they will
never get the balance paid, but sometimes this line of
thinking is not realistic. After all, if something should
happen to you, and you don’t have the money to pay even the
minimum payment on your credit cards, the insurance is a way
for you to preserve your good credit.
If your card issuer offers insurance for either disability
or unemployment, it is in your best interest to take them up
on these offers. After all, if you become ill for a long
period or you lose your job, the insurance will cover the
minimum payments on your credit cards until you return to
work. When you think about the potential financial ruin you
can face by being unable to make your credit card payments,
a few extra dollars a month is a small price to pay.
Another insurance that is often offered by credit card
issuers and is a good thing to have is life insurance that
will pay off the bill in the event you die. It’s easy to say
that once you are gone, it can’t hurt your credit, but the
reality is that if you die without insurance on the bill, it
becomes part of your estate and will have to be paid out of
the proceeds before your family sees any of the money. You
will protect your family by insuring the balance on your
bill and prevent it from becoming a part of the liabilities
of your estate, thus reducing the amount of cash that is
available for your family.
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