Check Out Payment Protection Insurance

Check Out Payment Protection Insurance
If you​ check your credit card bill carefully,​ you​ will notice that there is​ sometimes an​ optional extra charge there .​
You may have selected it​ and in​ that case it​ will cost you​ a​ set amount,​ or​ it​ may be that you​ have not selected it​ and in​ that case it​ will be zero .​
This payment protection insurance or​ PPI .​
Payment protection insurance has grown rapidly in​ the​ last couple of​ years and is​ now offered by virtually all credit card providers,​ on​ all of​ their products .​
It has had both praise and criticism,​ with one of​ the​ strongest criticisms being that it​ offers the​ customer no protection at​ all,​ and only protects the​ lender .​
Payment protection insurance is​ an​ optional insurance cover that you​ can pay for .​
the​ cost will be added to​ your monthly credit card bill and will typically be assessed on​ the​ basis of​ your outstanding credit card balance .​
So,​ for example,​ the​ cost of​ the​ insurance might be five pence on​ every pound you​ owe on​ your credit card bill,​ so if​ you​ owed one hundred pounds,​ five pounds would be added to​ the​ bill as​ the​ cost of​ the​ payment protection insurance .​
One of​ the​ fiercest criticisms of​ payment protection insurance is​ that it​ will not offer any protection .​
It is​ designed to​ guard you​ against such possibilities as​ losing your job or​ becoming unable to​ work .​
If you​ become unable to​ meet your repayments on​ a​ credit card,​ typically what happens is​ you​ will become subject to​ harsh penalty charges,​ your credit rating will be severely damaged,​ and eventually the​ debt will be referred to​ a​ collection agency .​
What the​ payment protection insurance is​ supposed to​ do is​ step in​ in​ such situations and continue making the​ repayments on​ your behalf .​
However,​ there are very strict conditions attached to​ payment protection insurance .​
It will only meet your repayments if​ you​ have lost your job through no fault of​ your own .​
So for,​ example,​ if​ you​ are made redundant,​ or​ become ill,​ the​ insurance might step in,​ but if​ you​ simply quite your job,​ it​ will not .​
Also,​ there is​ the​ issue that many forms of​ illness will not be covered,​ or​ if​ they last too long,​ the​ repayments will only be kept up on​ your behalf for a​ limited time .​
Therefore,​ you​ should consider carefully before committing to​ payment protection insurance .​
You can cancel it​ at​ any time,​ but it​ is​ one more expense that you​ should think about before incurring.
Many credit card companies make you​ choose their own payment protection insurance,​ however,​ did you​ know you​ did not have to?
Just recently the​ Office of​ Fair Trade announced that credit card companies were to​ allow consumers to​ choose their own payment protection insurance from a​ third party .​
This move is​ a​ welcome relief to​ consumers as​ now they can take their pick from a​ variety of​ payment protection insurers at​ a​ lower cost .​
It many cases consumers have found their payments have been halved and that they have more insurance cover than before.

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