"Credit Protection Service" Offers

[travelguru]

I know most of us have cards with high limits, but I am confused as far as the "credit protection service" most cards offer. For example, my Amex bill was almost $4000 this month and I had been talked into signing up for the "protection" service when I applied for the card. This was an additional $39 this month. Does anyone really think this is worth it? I have heard American Express covers your identity and when fraud does occur you are covered. So what is the sense of this service and is it really worth the extra money a month???

[Anonymous]

i always decline. i have 400 hours of sick time banked, and so much life insurance i think dw is considering as an icentive, rather than insurance.

[Anonymous]

I do not think they are worth it. Especially if you have insurance, or your job offers short/long term disability. I think it would be more beneficial to take that $39 and put it in savings in case something happened, versus giving it to the CCC.

[Anonymous]

The only way I would see using a credit protection service is if I had a continuously high balance and knew I couldn't pay it off if something were to happen to me. (job loss, medical absense - didn't have insurance)

That being said, I have NEVER signed in for a credit protection service..... much like how I have great disdain for those "extended warranties" that come with big item products.  (those always seem to break down a week AFTER the dang warranty is up)

[Anonymous]

This could have a different worthiness to different people. If you have a stable job and aren't worried about losing it then I don't see any need for it. I bet all of the people that got laid off during this mortgage crisis wish they'd had it if they didn't!


I will say one thing about it though. I have been asked to signup for it 3 times when activating CCs recently. I asked for CLI at activation all three times. I agreed to signup for this with two of them and was approved for CLI at activation. The one I declined I was also declined for CLI at activation. Could be just sheer coincidence. I also canceled the two that I signed up for before the trial months were up.

[Anonymous]

These credit protection offers seem to be ever so frequent everytime you need to call a CC company; whether it's activating a card or disputing a charge...  While I understand, it varies in situation to situation, I really don't think they're worth the cost.  You're probably better off saving a minimum of $20 a month in a savings account for an emergency than paying every month for a protection plan that just sucks your money up each month that you're not using it.  Not to mention, you're just throwing away money to a CC company when you could've saved it... 

[Anonymous]

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@Anonymous wrote:

These credit protection offers seem to be ever so frequent everytime you need to call a CC company; whether it's activating a card or disputing a charge... While I understand, it varies in situation to situation, I really don't think they're worth the cost. You're probably better off saving a minimum of $20 a month in a savings account for an emergency than paying every month for a protection plan that just sucks your money up each month that you're not using it. Not to mention, you're just throwing away money to a CC company when you could've saved it...

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While this emergency savings is a good idea in theory, somehow many people seem to rack up 20K in CC debt. It would take more than 6 months of savings just to make a payment for one month.

Example, I recently put a little more than 8K on my AMEX. Even though it'll only be there for a couple months the minimum monthly payment is about $170 - that is 8.5 months of savings just to cover a single month.

Good in theory, just not practical.

[Anonymous]

Well, it's practical if you have some savings already, and every person really should.  I understand some people don't, but every little bit you set aside helps; even if it doesn't buy you much time.

And lets not forget that when occurances like that happen, you can call your CC companies and they're normally pretty good about taking care of it.  Personal example from 4 years ago...  My dad had to have some surgeries and was on medical leave from work for 3 months.  His income was reduced greatly since most of it went to taxes.  He called up Citi, Capital One, Chase, Discover, and a couple others...  With a simple fax of some medical forms, he was exempt from any payments on those accounts for several months, varying from 4-8 months.  Citi and Discover stopped charging interest on those accounts during that time period as well.  The key is letting the companies know what's going on.  You may actually be surprised.  While it might not work for everyone, it's a definitely possibility if you've had a good trade-line with them.

Personally, I still see it as wasting money for those services, especially if you already have some savings that you contribute to.

Message Edited by UnderEstimated on 10-20-2007 09:22 PM