What do credit protection plans cover on credit cards? ?
Sunday, February 28th, 2010 at
11:17 am
In the event of job loss, do those plans allow a cardholder to suspend payments without adverse effect to credit rating? Or are credit protection plans essentially life insurance benefits for a creditor, in the event of the cardholder’s death?
Detox Diets
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How all the ones I have work is they make the minimum monthly payment for you.
They suspend your minimum monthly payment.
You can no longer use the card though.
They do not suspend the interest charges.
It merely means that you will not get a late payment fee for not making payments. /
Each plan is different but generally, they protect your credit by making the minimum monthly payments for you in case of death, disability, unemployment, and in some cases theft, when you might not be able to make the payments yourself.
But that’s only good if you have a lot of debt on your credit cards and need to make sure you make the minimum monthly payments or your credit score goes down. You get no coverage if your credit card account is balanced (because you don’t owe anything, there’s no min. payment the plan needs to make), and typically, a plan is good for only one account; meaning if you want to cover multiple cards, you’ll have to buy separate plans for each card.
They will make the minimum monthly payment for you. Usually this is not much more than interest, so, you still end up with the same debts as when you started. Some also require you to be disabled or unemployed for several months before they start.