PPI popularity radically drops due to negative publicity

August 31, 2007

When applying for credit cards, PPI (Payment Protection Insurance) is an option that most people used to take out instantly. However, due to a lot of negative publicity recently, PPI has now taken a dent in popularity. But is this negative publicity justified or not?

Well it seems that when you really look into PPI, there are some disadvantages that can often go unnoticed. With credit cards the PPI is not always that bad, but if you do not look over the contract before you sign it, you don’t know
what you are getting. For example, on many PPI plans, certain things are not covered which you would assume that they would be. Things such as certain circumstances in unemployment and various illnesses may not be covered. In fact, with some PPI companies, they will not pay out if you were not ill for 14 days or more. Now obviously 14 days is a long time and for many people living without their wage for even a few days can make a huge difference.

So when you really look into it, PPI is on the whole not useful for many people. You just assume that various things will be covered and it can be a real blow to find out that they aren’t.

The answer of course, is to look over your credit card PPI agreement before you actually sign everything. Make sure that you understand the terms and conditions and also that you know exactly what you will be paying out. The payments are usually quite low with 70p per £100 spent being around the price you can expect to pay. When it is put to you like that, it would seem silly not to accept it, but you really do need to check things over before you agree to anything.

Overall the drop in popularity is deserved, but it is also the responsibility of the consumer to ensure that they know exactly what they are getting.