Credit Insurance Programs

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Credit Card Applications » Research » Guides » Cardholder Benefits » Credit Insurance Programs

Credit Insurance Programs


Updated: May 28, 2019

The content is accurate at the time of publication and is subject to change.

Credit card insurance is one of the benefits that an issuer is ready to grant to its customer for his/her use of a credit card. It is considered to be a "free" program but in fact the cost of the insurance is already included into the overall price of the deal. However, the advantage is that if you were to purchase an insurance program independently, it can turn out to be a great extra to your budget.

So, a credit card insurance can really save you a big deal, provided, however, you are well aware of the insurance terms applied to your credit card deal. Thinking of applying for a credit card? Read on to learn how it can insure you against surplus expenses.

Today, credit card applications from major issuers offer several types of insurance programs, all being targeted at saving your money. Let's analyze them one after another, starting with the most common one.

Purchase protection. As the first and major function of any credit card is being a payment tool, this insurance is especially important for frequent shoppers. This insurance guarantees that you will be reimbursed part or all the purchase price cost if the item bought with your plastic appears to be damaged, lost or stolen later.

If you plan to purchase an expensive thing, this type of insurance should be of special value to you. Let's face it, you do not feel the lost of your money which goes as part of the application fee or maintenance expenses, but you do feel robbed when the valuable purchase is broken or stolen.

Fraud protection plan. ID theft and credit card fraud have become too frequent crimes to leave them without close attention. Should you fall victim to a fraudster, even it happens over the Internet or the phone, you are guaranteed to be covered by the insurance policy.

Stolen card protection. This insurance policy is to compensate you for any fraudulent transactions on your credit card, if you report your card's theft as soon as possible. In most cases you are liable only for $50 but this rule is being gradually annihilated.

Travel insurance. A growing number of customers are reported to use their cards, especially cards for frequent flyers, to purchase vacations. This category of cardholders needs to make sure that their plastic offers two very beneficial and not less indispensable insurance types.

The first is cancellation policy which allows you to cancel the holiday in the period between the purchase and the departure without incurring financial losses. This privilege cannot be underestimated in case of a hazard.

The second type is travel accident insurance which is to cover you should you be unhappy to endure an accident or even be killed while on vacation.

One of the rarest types of credit card insurances is Price protection. Not many banks and companies are ready and willing to offer the protection as it may cost them a good deal. The insurance policy promises to compensate you the difference between the price you already paid for an item and the new price you saw somewhere else.

As it may be quite a frequent occasion in the market, issuers try to avoid offering this type of credit insurance.

Try to keep checking insurance terms as they may be subject to changes in time and monetary limitations and you will always be able to avoid extra spending in an incident.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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