What is credit card insurance? Most credit cards will offer you protection on your account through insurance, paid as a small monthly fee. The amount of the fee usually depends on your current balance, though most credit card companies charge a minimum of a few dollars. Many card owners turn down the protection to avoid additional fees on their account, but there are many good reasons for carrying this insurance.

Loss of a Job

The prospect of losing a job is a scary one. Many financial experts recommend having up to six months of your salary saved in an account for such an event. Unfortunately, most of us don’t anticipate losing our jobs, and so we spend our money each month. Failing to set aside money in a savings account can severely damage your credit if you should be out of work.

It can at times take months to find a new job. You will need to continue making your house payment. There are also other bills that will need to be paid, such as utilities, vehicle insurance, food, and non-collateral loans. The last thing you will want to worry about is making payments on your Tesco credit card.

Card Theft or Loss

If your card is stolen, your account may rack up substantial charges. Often, this can happen before you even realize your card is missing. If you don’t use this card on a regular basis, you may not even notice anything is amiss with your Tesco credit card until you receive your statement the month following the charges.

Without insurance to cover the fraudulent charges, you may be forced to contact all of the vendors where the charges were made in order to straighten out the issue. In addition, your identity may be at stake. Identity theft is a huge problem these days, and purchasing insurance will give you that added peace of mind in the event that your card and other personal information is stolen.

Death or Disability

In the event of your death, creditors may still be entitled to the full balance left on your Tesco credit card. Usually this is taken care of during estate proceedings, but there can be complications. If you applied for the card with a co-borrower or a co-signer, they will be on the hook for what is still owed.

If you should become severely injured to the point you can no longer work, you will probably have trouble making your credit card payments. Insuring your account will help you make your payments in times of trouble such as this. Even if your disability is temporary, this allows you to focus on getting well instead of worrying about how to keep up with your payments.

Unexpected Financial Crisis

Many of us have had unexpected financial stress. Your car broke down. There was a medical emergency. Unexpected vet bills. Life happens, and your credit card company knows and understands that. Buy purchasing the insurance for your credit card account, you are protecting yourself from further financial harm.

One of the major reasons given for filing bankruptcy is medical bills. If you don’t have health insurance, they certainly can bankrupt you, and even if you do, one hospital stay can cause a serious financial setback. Consider paying the small monthly fee and be protected in case of unexpected emergencies.

While it’s true that paying a few extra dollars toward your credit card bill each month adds up, consider the cost and risk to you if something should happen. If you are unable to pay your credit card bills, you could seriously damage your credit score, which directly impacts your ability to get housing and other lines of credit – and it can even affect your employment opportunities.