What Is Payment Protection on a Credit Card
If you have suddenly noticed that you have a strange charge on your credit card statement that is notated PPI or payment protection insurance you might be questioning, "What is payment protection on a credit card?" If so, then you are one of millions of UK consumers who have been mis sold PPI on credit cards and loans of all types. Payment protection insurance, although sounding like a good cover to have, is more of a money-making gimmick for lenders than it is an insurance policy for borrowers. What is payment protection on a credit card? An expense that most of us don't need and certainly don't want!
The Payment Protection Racket
According to the Citizens Advice Bureau, payment protection has turned into the biggest racket to ever hit the lending industry in the UK. It could have provided good cover if it had been designed better but as it stands, it is much too expensive for the few benefits it provides. Lenders have found a way to increase their profits whilst providing nothing for the consumer in return. Since fewer than 15% of people ever qualify for payment protection benefits on a policy, it would stand to reason that lenders wouldn't sell PPI to the 85% who don't qualify. Unfortunately, this hasn't been the case which has led millions of people to seek PPI refunds.
What Is Payment Protection on a Credit Card and How Does It Differ From Loan Insurance?
One of the ways in which consumers started noticing that they had been mis sold PPI on loans is because the premium is a onetime, single premium added to the loan on closing. Since the cost of PPI can be anywhere from 13% to 56% of the amount being borrowed, that significantly impacts the repayment amount which is how they find it. On the other hand, adding PPI to a credit card works a bit differently. The premiums change month to month based on the outstanding balance that is carried forward from the previous month. Some credit card issuers charge a minimum PPI premium if the account balance is zero whilst others do not charge at all in this case. However, in either case, if PPI was mis sold against the cardholder's knowledge or wishes, he or she has the right to file for a PPI refund.
Keep in mind that filing a PPI refund on a credit card is a bit different from filing for a refund on a loan. Since the amount paid each month varies, it would be necessary to have a running balance of just what was paid to date. Many people choose to use a claims management company to help them file mis sold credit card PPI for this very reason. If you have been mis sold PPI you may wish to discuss filing a claim with the claims team at Belmont Thornton. They can have a claim pack in the post within 24 hours and by answering a few basic questions you could be on your way to claiming back what you have paid into mis sold PPI. What is payment protection on a credit card? It is money that you want to reclaim with the help of the PPI Claim Company!
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