Credit Card Fraud Insurance Worth It or Not?

**jlk82** · Nov 26, 10, 8:06 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** · Nov 26, 10, 11:28 am

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.

**Mogul of Pineapples** · Nov 28, 10, 8:37 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.

**jlk82** · Nov 28, 10, 11:47 pm

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.

**Cucumber** · Dec 3, 10, 1:25 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!

**eldoradokid** · Dec 5, 10, 8:58 pm

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

**infomaniac** · Dec 10, 10, 7:31 pm

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

**Cucumber** · Dec 19, 10, 2:34 pm

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

**Pete838** · Dec 21, 10, 7:18 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!

**CreditCardGuru** · Jan 6, 11, 4:58 pm

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

All the best,
CreditCardGuru

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Credit Card Fraud Insurance Worth It or Not?