Ask Stacy: Should I Pay for Identity Theft Protection and Credit Monitoring?

We've all seen the ads: Protect your credit for just $9.95 a month! Worth the money? Here are three reasons why it's not.

4. You caused this problem, and now we’re supposed to pay you for help?

More outrageous than the fees protection services charge is the fact that we should never have been in a position to need these services in the first place.

Unless you’re the one who negligently left your credit information lying around, you shouldn’t have to worry about your credit being co-opted, and you shouldn’t have to jump through hoops if it happens. The banking and credit reporting industries make billions annually from American consumers. If they can’t be bothered to create a system that protects the information they collect, sell and use to grant credit, they should solve — and pay for — the problems that result.

But instead of crafting a safer system, they craft clever commercials to sell you “protection.”

If everyone’s credit was frozen, high-profile data breaches would never occur, because the credit card information the crooks obtain would be worthless. The credit industry doesn’t deserve to profit by charging you for protection from the mess it created and the system it profits from.

Is credit monitoring all bad?

There are those who disagree with me and tout credit monitoring and protection as a smart thing to do. For example, in this article, personal finance author Lynnette Khalfani-Cox says, “the single biggest reason to use credit monitoring is that you’ll receive an incredible amount of credit education simply by staying on top of your credit. The mere act of constantly reviewing your credit files and being aware of changes to your credit profile promotes enhanced financial literacy and better credit awareness.”

Monitoring your credit is a good educational experience. And if you’re going to be applying for a mortgage or other big loan, the three free reports you’re entitled to yearly from may not be enough. But pay $10 a month or more for “education”? I’d advise against it, and so would the Consumer Financial Protection Bureau. From that agency’s website: “Before considering these services, be aware that free and low-cost services are also available to protect consumers.” They go on to suggest using fraud alerts and credit freezes.

Agree or disagree? Tell me what you think below or on our Facebook page!

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You can ask a question simply by hitting “reply” to our email newsletter. If you’re not subscribed, fix that right now by clicking here. The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’ve am a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. If you’ve got some time to kill, you can learn more about me here.

Got more money questions? Browse lots more Ask Stacy answers here.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Stacy Johnson
Stacy Johnson @moneytalksnews
I'm the founder of Money Talks News and have spent the last 40+ years in the personal finance trenches. I'm a CPA, author of a few books and multiple Emmy recipient. I'm ... More

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