No one wants to default on a credit card, but it is hard to foresee a job loss, difficult pregnancy, or any number of life changing issues. To protect our credit scores from those life issues, we often consider buying payment protection. Before buying it though, you should ask yourself a these few questions.
- How likely are you to default? This likelihood changes over time, so you may not need payment protection immediately. You can always buy in later or drop the coverage if you decide you do not need it.
- How effective is the coverage? Read the fine print. Some companies only pay for certain types of unemployment or only allow so many payments or claims during a set time period. These restrictions may make the protection a waste of money.
- Are you thinking about bankruptcy? If so, payment protection is a definite waste of money.
- Can you pay the balance off? If so, that is a better option than paying for payment protection.
For most people credit card protection is a fairly expensive way to throw cash away. Before spending that money each month, ask yourself the questions above and you may be able to keep a few dollars in your pocket. Also, you may want to research debt consolidation in Tucson, AZ.