Chase Killing Credit Card Insurance and Keeping the Fees

“It’s morbid to think that a consumer will get her money’s worth only if she dies by a certain date,” the Los Angeles Times’ David Lazarus writes, but Chase Bank thinks it’s just fine.

Chase offers credit card insurance of sorts called Payment Protector, Lazarus says. For a monthly fee, less than 1 percent of the card balance, cardholders are protected against job loss, illness and disability. Under the program, payments can be deferred up to two years. In case of death, balances up to $25,000 are forgiven.

That makes 95-year-old Dorothy Cross worth more dead than alive, Lazarus says, and she likes it that way. Cross has a balance of more than $38,000 across three Chase cards, and she’s been paying for the protection for about 10 years. She’s spent more than $16,000 to maintain the protection on her cards.

And now Chase is cutting her — and many others — off.

The bank is ending the program June 1, Lazarus says. The bank is giving customers who already have the service free enrollment until then. But that’s small compensation to people who don’t plan on dying in the next nine months and have already poured thousands into the program instead of paying down their balances.

Chase and other credit card companies, including Bank of America, American Express and Capital One, are eager to get out of payment protection because the Consumer Financial Protection Bureau has been handing out fines for deceptively marketing credit card add-on products, Lazarus says. The contract for Payment Protector says the bank can change the deal at any time.

What do you think of Chase’s decision to cancel its credit card insurance program? Let us know on Facebook.

Sign up for our free newsletter

Like this article? Sign up for our newsletter and we'll send you a regular digest of our newest stories, full of money saving tips and advice, free! We'll also email you a PDF of Stacy Johnson's '205 Ways to Save Money' as soon as you've subscribed. It's full of great tips that'll help you save a ton of extra cash. It doesn't cost a dime, so why wait? Click here to sign up now.

In debt? Find the solution that's best for you.

DebtFlex is FREE and confidential.

Click here to find out more.

If you're in debt, you might need help. But it can be overwhelming trying to find someone reputable who wont take advantage of you.

We've found a site that weeds out the nasty from the nice, and will help you pick a qualified and trustworthy partner to guide you on a path out of debt.

Comments & discussion

We welcome your opinions, but let’s keep it civil. Like many businesses, we reserve the right to refuse service to anyone. In our case, that means those who communicate by name-calling, racism, using words designed to hurt others or generally acting like an uninformed bully. Also, comments that include links to email addresses or commercial websites typically aren't posted. This isn't a place to advertise your business.