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What is credit card protection insurance

What is credit card protection

Credit card protection is important to protect yourself and your loved ones so that in the event of your death, disability or retrenchment, the outstanding balance on your credit card is covered.

A credit card can be a key financial tool if used sensibly. Not only is it convenient, but it’s also a handy way to keep a record of your purchases.

There are several benefits to having a credit card:

  • If you use your credit card responsibly you can build a good credit score, which will assist when you want to apply for larger loans, like a Home Loan or Vehicle Finance
  • Credit cards offer a convenient means to make payments in store and online, without having to carry cash
  • You can earn rewards points on your transactions, which means money back in your pocket at the end of the day.
  • As a member of UCount Rewards, UCount Tiering points are allocated each month for each qualifying insurance policy.

But what happens if you become ill or are retrenched and you are unable to make your repayments?

This could not only put severe financial strain on you and your loved ones, but could also negatively impact your credit score.

This is where a Credit Card Protection Plan could be your saving grace.

What is a Credit Card Protection Plan?

Credit card protection covers debt on your credit card in the event of:

  1. Retrenchment
  2. Disability
  3. Dread disease
  4. Death (including accidental death).

In the event of death, dread disease and disability: The outstanding balance on your credit card will be settled up to a maximum amount, which may differ between financial service providers.

In the event of retrenchment: The minimum monthly repayment of the amount owing on your credit card will be paid for a certain period.

Should you take out credit card protection?

Before you take out credit card insurance, first consider what other kinds of insurance you may have that may already be covering your debt. For instance, if you have dread disease or life insurance cover, your debts, including credit card debt, may already be covered by this policy.

Also, consider how many credit cards you have. If you have multiple credit cards, with no cover in place, then your debt may be substantial. In this case, it may well be worth taking out insurance.

What are the risks of not having credit card protection?

Without Credit Card Insurance in place, you may face the possibility of the following risks:

  1. You will still be required to make your monthly repayments even if you are disabled or retrenched
  2. Should you pass away, your family may inherit your debt and have to find a means to settle it on your behalf
  3. You could incur a negative credit score, which may impact on your future ability to apply for credit.

A Credit Card Protection Plan provides you with the peace of mind that, regardless of an unfortunate event, any credit card debt you may have will be covered.


Next step

Visit our Credit Card Protection Plan page to apply and for more information, or head to the Community to speak to other customers or bank consultants.