Credit Card Fraud Insurance Worth It or Not?

Get credit card fraud help: For victims of credit card fraud and identity theft, and those that can help.
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jlk82
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Credit Card Fraud Insurance Worth It or Not?

Postby jlk82 » Fri Nov 26, 2010 10:06 am

Does optional credit card fraud insurance make sense or will the laws in place already fully protect the cardholder?

If it makes any difference the plan would be for my Bank of America Visa platinum card. I don't remember all the details but I received a call to add on a service for 89 cents per $100 spent each month and that will protect me against many different things including identity theft and credit card fraud insurance coverage of some kind.


jeffysdad
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Postby jeffysdad » Fri Nov 26, 2010 1:28 pm

That is an absolute ripoff. Don't even consider it. It's practically a scam. The same with credit protection insurance if you lose your job, another complete ripoff.
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US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
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*All cards are registered with PriorityClub IDine program for 8 points/dollar at participating restaurants.

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Mogul of Pineapples
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Postby Mogul of Pineapples » Sun Nov 28, 2010 10:37 pm

I completely agree with jeffysdad. There is no reason to pay for credit card fraud insurance in the USA, where we have laws which limit liability to a max of $50 per account.

However what you describe jlk82 sounds more like credit protection for when you lose your job, have a medical emergency, etc. I don't think B of A offers credit card fraud insurance that costs money (I believe $0 liability is included free of charge). Are you sure the call you received was about fraud insurance? Regardless the credit protection is also not worth it- it may sound good at first but after reading the details you will see it's way too costly for what you get in return.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

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American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

jlk82
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Postby jlk82 » Mon Nov 29, 2010 1:47 am

You guys are right. I read it ove r and it's not going to be worth it. Since I pay off my bill each month I'm not a *huge* risk for Bank of America because if something were to happen to me the most that could be lost on my account would be a month of charges. Yet I am paying for the service almost 1 percent every month? If it were 1 percent once per year I would do it but paying that every month is a lot of money. Oh and that was for credit protection, not credit card fraud insurance. I was confused because the rep tried to get me to buy a service called Privacy Assist too and I was mixing the two up. Sorry about that and thanks for giving me your two cents.

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Cucumber
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Postby Cucumber » Fri Dec 03, 2010 3:25 am

Payment protector plans are a complete joke. The only way one would be worth the dough is if you knew 100% for sure one of the covered events like death would happen soon. and if you did know that in advance and signed up anyway then that would probably be big time illegal fraud!
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eldoradokid
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Postby eldoradokid » Sun Dec 05, 2010 10:58 pm

How much money do these services make for the credit cards because they are pushed really hard as a sell.

infomaniac
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Postby infomaniac » Fri Dec 10, 2010 9:31 pm

I have never heard of any personal finance pundit recommending credit card insurance.

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Cucumber
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Postby Cucumber » Sun Dec 19, 2010 4:34 pm

It must bring in a lot of $$$$ because I get asked to signup like every frickin time I call customer service.

:mad:
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Pete838
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Postby Pete838 » Tue Dec 21, 2010 9:18 am

Think about it: $0.89 (or thereabout) per hundred dollars per month.

Without the additional "insurance" the bank loans you, say, $5,000 at 12.9%. They earn just under $650 from you in a year if your balance stays the same.

By adding the insurance they extract an ADDITIONAL $534 if your balance stays at $5K. That is equivalent to an additional 10.38% interest at $0.89 per hundred of your balance!
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Postby CCG » Thu Jan 06, 2011 6:58 pm

Here is an article about credit card payment protection insurance that I highly recommend reading.

All the best,
CreditCardGuru



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