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
Yesterday, on October 28, Uber introduced their new team – Uber Money. According to the official website, it is supposed to work on financial products and technologies to let their customers access, manage, and grow money easier and faster. Uber is expected to develop several new features, as well as make enticing improvements to existing […]
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 […]
Some serious changes are in store for many Citi credit cards like the Citi Prestige Card, the Citi Premier Card, the Citi Double Cash Card, the Costco Anywhere Visa Card by Citi, the American Airlines AAdvantage MileUp℠ Card, and some other. The updates imply elimination of some consumer and travel benefits. The bank’s official response […]
Priority Pass is a world-known program offering its members access to over 1200 airport VIP lounges with free food, drinks and entertainment in more than 500 cities across 143 countries. The program is available to everyone who’s paid for membership, regardless of a tickets class.
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.