“credit protection fee” on credit card bill?
Wednesday, March 31st, 2010 at
3:21 am
Is it a must to have a “credit protection fee” when you have a credit card? Is it pro-rated to how much your balance is? I am not talking about overdraft protection, this is something else. If anyone out there can enlighten me on this matter, would appreciate it.
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It is one of the worst types of insurance. You are already protected by the federal government if you notify the credit card company quickly..
No, as a matter of fact the “credit protection fee” is more of a money maker for the credit card company then helpful to you. It is usually a percentage of your balance. Most experts say don’t get this unless you are unsure about being employed for a while when you maybe able to get the protection to kick in.
This is NOT a mandatory fee. From my personal experience it is WORTHLESS. I was paying this on my card for a year and then got laid off and they refused to pay.
These fees are usually quoted as a number of cents per 100 dollars per month, and the first month is “free”. If you do the math it’s 8 percent or more per year in addition to the interest.
It is an option to have credit protection on a credit card. It is a charge to your account based on your balance. Most people with protection on their cards never end up needing the use of it & pay it monthly for no reason. It is best to have protection when you pay off any balance owed to a card on a monthly basis otherwise the costs can drive you into a hole. Credit protection is if ever for example you lose your job “while your account is in good standing” they “may” cover you monthly payments but that is not garanteed and f.y.i. they tend to not make regular payments which in turn makes your account go delinquent. My personal opinion: I don’t recommend it. It just adds to your debt.