I’m guessing that most of you do have at least one credit card. I actually have 3. They have tremendous benefits and from an insurance perspective, give me some protection on travel insurance, extended warranties, etc. There is one thing I simply cannot stand though. Two of the three issuers also sell insurance to their cardholders (the 3rd one maybe does it too but they have not harassed me about it).
So every time my card needs to be replaced (expiry, risk of fraud, etc), they start giving me that annoying sales speech about buying their insurance. What does it cover? In the event that I would be unable to work for medical reasons, my credit card minimum payment would be made, every month. Sounds great? Wait, it gets better. There is actually no charge for the insurance in most cases.
There Has To Be A Catch?
Of course, it’s not that simple. There is no charge as long as I keep my balance at $0. I don’t intend on keeping a balance believe me, but I know such things might end up happening at some point in the future. If it does, I’d be very upset to see some % of that amount be charged as a supplement for my insurance.
Why Do You Think Those Companies Offer This?
I know that you could make this argument about any type of insurance, but clearly, they expect to make a lot of money on this. As a start, they know that most customers do not expect to hold credit card balances even though they usually end up having one. So they expect a product that has no cost and pay little attention to the % that it does end up costing.
Benefits Seem Rather Marginal
When I think about it. If I become unable to work, having my credit card company pay my minimum payment will have little to no value, especially considering I don’t expect to hold a balance. I mean, how much value would I truly get out of it and what is the likelihood that I would be:
-unable to work
-have a high credit card balance
It seems far fetched to me and for that reason, I ALWAYS turn it down. Unfortunately, it’s never that simple. They have to tell me the whole speech before activating my card, even though I try to stop them in the middle of it. Maybe they’re trying for me to just say:
“Yeah ok fine I’ll take it”
It really is annoying as he**!! Do some people really end up just giving up?