Card Add-on Products Stage a Comeback

May 8, 2013
Fox Business 
credit card news

Credit card "add-on" products suffered from regulatory restrictions last year; but analysts say they could bounce back, with tighter marketing pitches and lower prices. Payment protection, or debt protection, usually cost less than 1 percent of the card's monthly balance and typically cancels minimum payments on a card for a certain length of time after an emergency, such as job loss. Other such products include identity theft protection and credit monitoring services. A Government Accountability Office report in 2011 revealed that consumers received only 21 cents in benefits for each $1 spent on debt protection in 2009. The finding prompted several class-action lawsuits, and the Consumer Financial Protection Bureau started issuing penalties for the way add-on products were marketed. Now, however, add-ons may be making a comeback. Discover Card plans to resume marketing add-ons, possibly later this year. Wells Fargo currently is offering "credit defense" payment protection and identity theft services after moving toward in-house marketing and lower pricing. Smaller card issuers, especially credit unions, still offer payment protection plans, with rates typically of about 90 cents per $100 of the monthly balance.
Web Link







Abstract News © Copyright 2008-2013 INFORMATION, INC.
Powered by Information, Inc.

Stay Updated

Join the fight against predatory lending. Enter your e-mail to sign up for breaking news, action alerts, and CRL's original research.

   Please leave this field empty
  

Help Us End Predatory Lending

Predatory lending destroys family wealth, and preys on our most vulnerable communities. You can help us end abusive lending practices by donating to CRL, or by sharing our work with others.



`