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What are Credit Card Payment Protection Plans?

By Brown Ezilon.com Articles Published 06/15/2011 | Credit Plans

Credit cards are the life existence of the United States along with this fact is the knowledge that the credit card debt has skyrocketed resulting in devastating results for the card holders as well as the card issuers. This has led to numerous unpaid credit card debts as well as other default concerning credit card payments.

Due to this disastrous trend most credit card companies are proposing credit plans which can help overcome these problems, notably payment protection plans. These are optional plans that customers can benefit from if they consider they may need them for their individual status and position. These plans that are now available on the credit card market have been closely considered by various insurance companies and have been approved.

These credit card payment protection plans will help all consumers who are having problems clearing their credit card debts in cases of unforeseen emergencies, such as job loss or illness. Insurance companies have studied the cases and have arrived at an annual or quarterly premium that is charged to the credit card holder. This premium is calculated on the basis of a percentage of the outstanding balance on a particular credit card.

This type of credit card payment protection plan as an insurance is very important for in this age when recession and loss of employment is at a peak many are at risk of losing their jobs, thus credit card companies are proposing this option now. These new credit card payment protection plans are in fact insurance plans that are basically similar to insurance coverage. Any person who foresees problems for future payments should consider this option in order to guarantee protection in cases of financial problems. This will ensure a safety outlet for credit card holders that find themselves in difficulty and cannot find financial aid.

There is now a choice of insurance plans to be found on the market and it is worth doing some research work before making a choice. There are simple plans offered by credit card dealers such as American Express which suggest the credit card holders should pay 85 cents on each 100 of the outstanding balance on a monthly basis. Should the credit card holder be unable to pay the amount due then the account protector plan is activated, whereas the credit card company will pay up to 500 on the monthly minimum payment for a period of up to two years.

There are other plans that work basically on the same principal and they may vary their premiums and the payment period, this is why it is worth to research the market thoroughly in order to get the best possible terms. Credit card payment protection is a worthwhile option and benefits the card industry immensely. A customer holding a credit card must not underestimate this kind of service and deal with this type of credit payment protection wisely.