A few days ago, a customer came into my office and file a complain. Here is the story, Mr. Smith (name has been changed to protect the innocent) got his credit card a couple years ago. Three months after he received his credit card, he received a call from the credit card company offering to enroll in the company's credit shield program; basically, he was told that it is a life and disability insurance. He was told that in case of death, critical illness or disability, his credit card payments will be taken care of by an insurance company, relieving him and his family of an additional burden. All he needed to do was to pay an insurance fee which is a certain percentage of his monthly balance.
To cut it short he, decided to enroll because of the benefit the telemarketer told him. About six months ago, he had an accident; he was hospitalized for about 5 months. So he called the insurance company and filled out all the paper works. When he received his billing statement the next month, he was so surprised that the insurance company only pays the minimum payment of his balance. What happened to the rest of the balance? It was charged with interest, and will continue to do so until he pay the full amount.
\"cash Back Credit Cards\"
Let's take a closer look. The insurance only cover your whole balance if you are dead, if you are still alive, they will pay only the minimum payment. Did the telemarketer tell you about this? Yes, they did, most of the telemarketer read from a script prepared by the company, this is to ensure that they inform all the necessary terms from the customer. The only thing is that the script have been prepared professionally inserting those terms in such a way that we do not pay attention and the telemarketer has been professionally train that they emphasize only the most lucrative offer.
So the next time the credit card company offers you additional life and disability insurance, make sure you ask them about the coverage policy for temporary disability and permanent disability. If they tell you that the marketer might not tell you the truth, ask them to send you the term and policy, say that you will discuss it with your lawyer before making a decision. This will help you unnecessary problem in the future.
Is Credit Shield Useful?
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