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Regular Contributor
keith021
Posts: 169
Registered: ‎11-01-2009
0

Credit Card Protection Plan(s)

I see this option is available for just about all credit cards, but I was wondering if it is really worth it. For example; if you have a medical emergency or job loss, the credit card protection plan with cover at least your minimal payments. I think the plans are fairly cheap; ex:  89 cent per $100.

 

What are your thoughts and have you ever had to use the protection plan before?


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Ryanfico
Posts: 72
Registered: ‎04-21-2009
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Re: Credit Card Protection Plan(s)

I actually opted for this on my cards. No reason to take a chance in this recession.

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Epic Contributor
haulingthescoreup
Posts: 28,098
Registered: ‎04-01-2007
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Re: Credit Card Protection Plan(s)

[ Edited ]

keith021 wrote:

I see this option is available for just about all credit cards, but I was wondering if it is really worth it. For example; if you have a medical emergency or job loss, the credit card protection plan with cover at least your minimal payments. I think the plans are fairly cheap; ex:  89 cent per $100.

 

What are your thoughts and have you ever had to use the protection plan before?



Well, the problem is, these things are usually set up in a way that the CCC can pretty much weasel out if and when you try to collect. There seems to be some version of a phase-of-the-moon or color-of-your-eyes clause that makes the protection invalid. A year or so ago, we had a member with a newborn with major medical problems, and she lost her job, and found that her Chase payment protection plan covered nothing at all.

I can understand the thinking behind getting these plans, but they are mostly a cash cow for the lenders. My recommendation would be to first take the money and put it in a rainy-day savings account instead. Secondly, never put anything on a credit card that you couldn't pay off immediately with money from savings or wherever.

Financial writers also advise against these plans, pretty much universally. Again, you need to evaluate your own situation, read all the fine print on these things, dream up some worst-case scenarios and apply them against the coverage that is offered, and mainly, don't have balances that you can't pay off and that enslave you to lenders.

edit: cna't splel
Message Edited by haulingthescoreup on 01-20-2010 05:43 PM
* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Moderator
MarineVietVet
Posts: 14,948
Registered: ‎07-14-2009
0

Re: Credit Card Protection Plan(s)

I agree with hauling. If you feel the need to have protection to pay credit card bills if something bad happens then you have way too much charged on those cards.
Super Contributor
DI
Posts: 5,744
Registered: ‎01-28-2008
0

Re: Credit Card Protection Plan(s)

CCPP's are not needed for cards that are PIFM.
Frequent Contributor
Cotton_Britches
Posts: 259
Registered: ‎06-11-2008
0

Re: Credit Card Protection Plan(s)

It's a ripoff. Stay away.  
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