Stay away from plans for card protection, advices Government Accountability Office
Consumers who are planning to opt for card protection plans may want to heed the advice of the Government Accountability Office and shun those plans. Most of the credit card lenders today offer their card holders the option of choosing card protection plans so they can benefit the customer; however, the plan is designed to protect the issuers more than consumers.
The Government Accountability Office says that card holders who are keen to safeguard their payments against defaults will opt for the debt protection plan which works more in their favor. The amount that card holders have to pay towards this protection plan ranges from 85 cents to over $1 for every $100 that is carried forward on the card. If the fee is considered to be a dollar for ever hundred dollars, then for a balance of $2500, the card holder will have to pay $300 annually in the form of fees. In the year 2009, credit card companies generated a total amount of $2.4 billion in the form of fees for the debt protection plan.
Of the total amount that was generated as revenue, only $518 million was paid out to card holders in the form of benefits against claims. This accounts to only 55% of the total revenue generated. 24% of this revenue was also used to cover administrative costs.
The United States Public Interest Group recently conducted a survey which has revealed that, of the 392 banks that took the survey, only 40 percent complied with the Truth In Savings Act.
Latest Other Card News
2020 has definitely been a very unusual and challenging year. Many of us have been waiting for its end more than ever. And now, when there is less than a week left until the beginning of the new year, it’s time to sum up the outgoing one and find out the results of the annual […]
Walmart is finally ready to introduce a new subscription service offering free same-day delivery and fuel discount. Walmart+ was supposed to go live back in July, however, it was delayed due to the COVID-19 outbreak. Now the launch is planned to take place on September 15. The new product will help you order any goods […]
This month, American Express introduced its new tool called MyCredit Guide. The Amex website says: “We believe everyone should know their credit score and have the tools to understand it better.” That’s why the new feature was developed. Using the tool, you can find out your credit score and take a look at your credit report, […]
A virtual credit card is a unique credit card number that is linked to your main credit card account but is different from the physical card number. The virtual credit card number allows to shop online or over the phone without using your physical credit card. The numbers can usually be used once and expire if not used. The cardholders can also delete the numbers if they want or need to.
The results of the 2019 Debit Issuer Study, commissioned by PULSE®, a debit/ATM network, and conducted by Oliver Wyman, a global management consulting firm, show that consumer debit use has skyrocketed in the last year and will keep soaring. In 2018, the number of debit transactions increased by 6.7% reaching more than 68 billion. According […]
