The following guest post is from Tisha Tolar. Tisha is a freelance writer providing content for CreditCardAssist.com, where she regularly writes about credit cards, rewards programs and general consumer finance issues.
Credit cards certainly are not what they used to be. There is so much competition in the industry it seems each company needs to implement a new concept each week to keep account holders happy. When you applied for credit cards back in the day, basically you received a credit limit and a piece of plastic, along with monthly statements. Now, it’s a whole different story.
Too Much At Once
From cash back rewards cards to bonus miles to free airline miles, credit cards have come a long way and not always for the positive. While credit card spending has hit record highs and consumer debt is even higher, credit card responsibility is essential to maintain great credit scores and good money management skills. It becomes all the more difficult to stay on top of your financials when terms keep changing, interest rates keep rising, and more fees and penalties are getting tacked on to your account balance each month.
What’s Up With Insurance?
Adding to the frustrations are the additional programs your credit cards want you to sign up and pay for, such as disability and life insurance. Most people will be offered the insurance option during the application process. If you decline at that time, chances are good that you will be solicited by phone and mail in the near future. The credit card company will likely present the sales pitch that in the event of your death, disability, or serious illness all of your credit card payments will be taken care of. Your family will not have to be concerned with your credit card debts during that tragic time. You can obtain this additional insurance by paying a small percentage of your monthly balance.
The Things You Don’t Need
What the credit card company does not tell you is what really happens should you fall ill or die. In the event of your untimely demise, only your minimum credit card payments are covered by the insurance. Your entire balance is not paid off in a lump sum, which means that finance charges still accumulate on to your balance. The credit card company is essentially selling you a policy that protects them, and not you.
If you have already fallen for the pitch to buy insurance, you will already know that it becomes difficult to cancel the policies. You end up having to deal with the insurance company directly and the credit card company will not be offering you assistance. On some occasions, simply contacting the insurance provider becomes an impossible task. The credit card companies can be particularly forceful and oftentimes customers end up signing up for coverage without adequate knowledge. Companies will also offer free introductory periods that you will find hard to cancel.
Your best bet is to read everything in detail before signing up for anything. Do not be afraid to say no when asked or pushed into a policy. If you are interested in insurance policies that will truly take care of your debts and your loved ones, speak with a qualified insurance agent and find a policy that will work for you and most likely cost you less money.