PPI needn't be "expensive add-on"

October 26, 2006

Credit card providers may not be offering the most competitive and comprehensive cover on payment protection insurance (PPI), says MoneyExpert.com.

PPI, which covers monthly repayments on credit card borrowing and unsecured loans in case of accident or unemployment, can also be obtained through a specialist insurance broker, the financial advice website stresses.

According to chief executive Sean Gardner, credit card companies often overprice: "You're very likely to get a better deal elsewhere."

The PPI credit card companies provide is often "an expensive add-on" to credit cards, Mr Gardner warned, with almost half of the 213 credit cards on the market charging over the average monthly fee of 75p per £100.

Consumers should shop around and compare the cover offered by "any major insurance broker", he added.

An Office of Fair Trading (OFT) market study launched in April found that "many consumers are failed by PPI - insurance which gives them a poor deal and often less protection than they think".

Last week the OFT asked the Competition Commission to investigate the PPI industry.