Record numbers of credit cards
MORTGAGE MAGAZINE - 1ST MARCH 2005
Record numbers of us have credit cards these days.
They’re a great tool if you use them correctly. But most of us don’t and record numbers of us are in debt and wracked up thousands on our plastic.
Credit cards and banks will offer to protect your credit card payments payment protection insurance, which will cover your credit card payments for a period, usually six months, if you’re unable to work through accident, sickness and unemployment (it must be involuntary). However, if you do claim, most insurers will only pay your minimum payment each month. Simon Burgess from the insurance broker Burgesses says credit card cover such as this isn’t work the paper it’s written on. “There are no circumstances when you should be buying this cover. It offers extremely poor value.”
He pleads with credit card holders not to get any credit card or personal loan insurance with a bank.
Indeed, MP’s recently called on the Financial Services Authority to investigate the selling of payment protection insurance.
If you want to protect your credit card payments, you’re much better off with income protection insurance, which protect a good part of your income if you’re unable to work due to an accident or sickness. It won’t cover you for unemployment however, unless the reason for a redundancy was ill health.
