You may or may not have heard some hype about credit card payment insurance. Basically, you pay a monthly premium and if you can’t pay your credit card bill because something awful happens like you get injured or lose your job.
It really sounds like a fantastic concept, especially since you certainly cannot predict what will happen and when. But whenever you are paying for anything and especially anything expensive, and this unusual type of insurance is certainly no exception.
Recently named on Time.com as a product that you should stop buying immediately; credit card payment insurance seems like more of a scam than a solution.
Rather than paying your credit card bill for you, this service, pauses your credit card bill and even your interest rate for as long as two years.
Sounds great, right?
Well not quite. There are actually quite a few loopholes and exceptions that will prevent you from reaping the rewards, even if you have been faithfully making your monthly payments for your insurance, that you might get the help that you need when you need it.
There are very rigorous hoops that you have to jump through just try to activate your payment insurance. There are numerous rules to qualify for, and even if you do qualify, you still need to submit multiple applications to even be considered to have your credit card bills and interest suspended.
This means that you have very real and serious chances of being denied, meaning you will have paid all that money for nothing. Unlike most insurance that chances are you will probably need to use at some point in your life and actually be able to access it, credit card payment insurance you may need but probably won’t be able to access because you might not be approved, even after paying the premiums.
The trouble with credit card payment insurance is that once you sign up for the service, you assume that if something happens, you will actually be able to use this unusual type of insurance, but chances are very good that your situation won’t qualify or you won’t be approved.
So your credit will suffer and your debt will accumulate and there is nothing you can do to stop it with payment insurance.
In the end, it’s best to save the money that you would have used and save it for a rainy day instead. Credit card protection insurance simply isn’t worth the money and especially the hassle that is required to even attempt to get any use of the service.