Credit Card holders Losing a ‘Feature’

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According to this article in USA Today, many credit card companies are ceasing to offer the ‘Credit Protection’ service (i.e. ‘Insurance’) on their cards.  I’ve always thought of these as a bad idea for Consumers.  Even BDR (‘Before Dave Ramsey‘), when some of our cards had  a balance near $20k, I would never consider one of these options.

During the tech bust of 2001-2002, I was down-sized from my company.  At the time, I think we had around that $20k on a Citi Card.  In talking to my better half (aka. Mrs. OuttaDebt) we discussed the idea of this ‘insurance’.  I believe the cost was around $0.59 per $100 on the card.  That would have been around $120/month added to the card!

What happened after this layoff is for another post, but it didn’t make a whole lot of sense for us to pay more per month in insurance than our minimum payment was at that time.  Fortunately, I was able to find some contract work pretty quickly, but if I hadn’t been as fortunate, I hope we would not have changed our minds.

Do any of you have this Credit Card Insurance?  Has it helped or hurt you?

 

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