Today, my husband got a call from one of the companies that he has a credit card with. The credit card company was calling to let him know about some strange charges that were recently made. It turned out that someone else stole his credit card number, and ran up a fairly big bill. Would credit card insurance have helped us in this situation?
It’s never a pleasant experience to have your credit card company call you, to ask about some suspicious charges that recently occurred on your credit card. In our case, what happened was that the credit card company noticed that someone had paid for a full tank of gas, and then ran up over $500.00 in purchases at Bed Bath & Beyond. This is a store that we have shopped at once or twice, but is not one that we frequently shop at.
The credit card company representative asked my husband if he recognized those charges. My husband said no. It turned out those charges happened while my husband was working, and, since he works from home, there would be no possible way that he could have been the person who used the credit card at that time. The representative then asked about some charges that were on the card from the day before, which were ones that we knew about, because those were legitimate purchases.
The representative said that they will dispute the charges, and that my husband will not have to pay for those charges, which is a relief. This is not the first time this year that someone else has gotten a hold of one of our credit card numbers, and used the card to make purchases that we did not authorize. It made me wonder, what does credit card insurance do for you? It is clear that having the insurance doesn’t prevent a thief from stealing your card number and using it himself. We didn’t need the insurance in order to make the credit card company decide that we were not responsible for those charges. So, what does credit credit insurance good for?
Credit card insurance offers something called Balance Protection. Purchasing this kind of insurance causes the credit card company to essentially takeover making payments on your credit card balance while you are recovering from certain kinds of situations. If you lose your job, (not if your quit your job, but if you become unemployed through no fault of your own), the credit card company will keep paying your balance until you get back on your feet, and find employment again. Other situations that it covers includes if you become disabled, or if you become hospitalized for a long time. If the cardholder dies, the balance protection can help his family with the balance that is left on the credit card.
In other words, credit card insurance can be helpful if you run into those kinds of difficult life circumstances. But, no amount of credit insurance is going to ensure that you will be protected from the thieves who steal your credit card number, and go on shopping sprees.
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