What is Credit Card Insurance?
Credit Cards are a part of a system of payments that have evolved over a period of decades. It was first introduced as a credit system for gasoline articles during the 1920ís and later extended to various other products. Nowadays the credit card system has grown to a global extent and the cards are usually referred to as plastic money. This feature has enabled millions to buy or acquire objects on a credit basis. The Credit card
has also evolved as a standard for transactions over the internet.
Working of Credit cards:
The credit cards are a method of authentication for the credit account a person holds in a bank or a credit union
. These accounts are credit accounts and have an arbitrary limit which is indicated by the type of credit card a person holds. The credit cards may be of different types such as silver, gold or platinum. These credit limits are decided by the bank or the credit union based upon the credit report that is drawn for the person by analyzing his or her financial records.
The credit card has various authentication features like the magnetic strip which is encoded with the account information, the specimen signature
on the reverse side of the card and a card verification number. When the card is "swiped" the account information is logged and the money is transferred from the arbitrary account balance to the merchant's account. The person has to repay the amount he has borrowed using the credit card at the end of every month. If the person does not repay this amount, legal action can be taken after a stipulated period of time and after following some protocols.
Credit Card Insurance:
Over the decades the credit cards have been the target for the insurance industry purposes leading to an entirely new department, credit card insurance
. The credit card insurance companies were a major hit since the normal insurance premiums in Canada do not pay up for your credit card bills after your death or during critical illness, accidental dismemberment. By covering yourself with credit card insurance, you will be saving your credit score from taking a nose dive during the unhealthy times. During sickness the customer will mostly be unable to work. So his or her credit card payments
will be delayed. The credit card insurance will prevent this delay and stop the interest charges from reaching sky high
Credit Card Insurances in Canada:
In Canada, credit card insurances can cost lesser than $1 for every $100 that show up in your monthly statement balance. A provincial sales tax
will be an additional charge in the provinces where they are applicable. The benefits and provisions of credit card insurances vary from agency to agency. There are two types of credit card insurances in Canada - Unemployment and health. Strikes, job loss, lockout and disability can be cited as reasons for seeking insurance under the unemployment category. Meanwhile, accidental death, critical illness, accidental dismemberment are usually the cases considered for applying for a credit card insurance under the health category.