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?