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Dec 04, 2012, 12.24 PM IST | Source: Moneycontrol.com

Have you secured your credit cards with protection plans

Today having multiple credit cards is not a thing to boast about. It has become an integral part of one’s life. A credit card fills the gap of uninterrupted funding of one’s needs.

Rajiv Raj
www.creditvidya.com

Today having multiple credit cards is not a thing to boast about. It has become an integral part of one’s life. A credit card fills the gap of uninterrupted funding of one’s needs. For some it is a safe mode of holding purchasing power and use it wherever required. This makes credit cards a priced possession for many. Till the time you have it, you make the most of it. However, the moment you lose it either through theft or for some other plausible reason, it becomes a big concern. One of the reasons being your cards is susceptible for misuse. In such cases it is advisable to avail of card protection services.

There are two options you have. These are Credit Protection Plan(CPP) or OneAssist. In the event of loss of credit cards or theft, card protection services come handy. One has to pay a fixed annual fee to subscribe to this service. One has to inform the service provider about the details of cards credit, debit and ATM. In case of loss of credit cards, after calling up the number provided by the service provider and your credentials verified, all your cards would be blocked.

This service is available in multiple variants. Depending on the variant one has opted for, the card protection service pays for bills incurred on your card after loss even in the period before you intimate the loss. This, however, has a limit. Depending on the variant this amount fluctuates between Rs 50,000 to Rs 200,000. The service also pays for all expenses incurred on your credit cards after you intimate the loss of the card. Thus, you are not burdened with bills that arise out of fraudulent use of credit cards.

Since the service provider pays for transactions incurred before and after the intimation of the loss of cards, the complicated disputes arising out of the timing of the transactions is settled. Sometimes bank may argue that the transaction on a particular card took place before the card holder intimated the bank and hence the bank is not liable for allowing that transaction. There are many cardholders who do not pay the ‘disputed amount’, which affects their credit score. Such incidences crop up when one does not avail of credit protection services. If one subscribes to a credit protection service such as CPP or OneAssist, the possibility of a black spot in the credit score report is very slim. The very nature of card protection services of guaranteeing payment of bills even after the loss of cards helps the cardholder in retaining their credit score.

Credit card protection service also pays for emergency travel and your outstanding hotel bills in India as well as overseas. Some variants of credit protection service offer assistance for replacement of permanent account number (PAN) card, driving license and passport. Depending on the services offered you might have to pay Rs 1050 to Rs 2000 per year for a credit protection service variant of your choice. Hence, just like availing of a health insurance serves its right purpose in assuring peace of mind in times of crisis, so should one avail of card protection services for greater peace of mind.

The writer is a Co-founder & Director at  www.creditvidya.com

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