Payment Protection Insurance is a little gremlin of a payment that in all cases is a waste of money and is only another way in which credit card Company’s draw cash from us to make more profit.

(PPI) is a payment that we make to our that we think will cover our payments if we loose our jobs, fall sick or have a bad accident, but in a lot of cases we don’t even realise that we are paying it in the first place and is basically a expense that you don’t need and can be completely useless.

Related Articles

Credit Card User Profiles
Credit Cards – Issuers Making Money

I will try and give few examples trying to explain why these (PPI) polices are an unnecessary thing to have.

• If you pay off your credit card in full ever month then there is no need to take out this policy at all.
• Most people who loose their job or fall ill, will think that the cover they have will run continuously until the debt is paid off. Wrong, most will only cover you for a year’s payment, and then it is up to you to pay the remaining balance, if you are still out of work or off ill with no steady income.
• The repayments that the insurance will make will also not pay off the debt in full. You will probably have the natural reaction of dividing the debt by the 10% that the insurance will cover every month, this could mean thinking that a debt of say £2000, will be paid back at £200 every month and the debt will be cleared, again wrong, that £200 payment will take you balance down to £1800, then the following month a payment of £180 will be paid and so on, this is just an example on how it works, and has been done without adding interest that would be put on top of these amounts.
• The price that you pay for a (PPI) is usually set at between 70-80p in every £100 owed, this is hidden in beside the other larger charges on the card and it only comes into play when the amount that is owed is at a high level, this is another shrewd way of getting the full effects of the profits to be made through this.
• Another one that affects the self- employed, is that because credit card Company’s don’t take into account their customers working situation, then people who are self-employed will not be covered if they are made unemployed, something they are paying for in the policy.

In summary

Try and avoid these policies if possible, but if you feel you need that little bit of added security, then taking out a policy with one of these two company’s is a lot cheaper and more trustworthy than a (PPI), they are Good Insurance and Payprotect, these company’s will pay more to your debt over the same period of time and at half the price than a Payment Protection Insurance cover on a credit card.