It seems like an easy choice: to buy or decline insurance offered via your credit card company. With so many still reeling from the recession and more recent economic problems, the logical mindset is to cover the bases every way we possibly can, but is it always the right choice?

Many of us have received calls from our credit card and charge card companies with an offer to “add” an insurance policy that would cover the payments while protecting our credit ratings if we find ourselves sick or withoutt a job. It’s a smar precaution, right?

Families who have been forced to use their credit cards for expenses like groceries and lunch money for the kids know well the expensive nature of taking cash advances or using their cards for smaller purchases. After all, who wants to pay interest on a gallon of gas that’s already pushing $5 a gallon, right?

The problem is too many times, we’re looking at the many benefits and all we hear (and all we’re told) is that if we lose our jobs or face other expensive life events, like an injury or illness, that little insurance policy is going to pick up the pieces for us until we’re back at 100%. What consumers aren’t always told, however, is these policies often come with very specific compliance guidelines and restrictions. One family paid the credit insurance for six years – it was paid on time and up until 2011, it was never something they needed.

When both spouses lost their jobs within the same week, they thought at least their credit card payments would be made, which would have resulted in a bit of a consolation. They soon learned, however, that the husband’s occupation was one that was not included in the policy. He was a construction worker and the insurance company said the work in this field is not guaranteed and that its policies would not be covering any kind of seasonal work. If that didn’t hold up, the insurance company could always fall back on the fact the husband was never with one company for more than a few months – or a year at the latest. He’s a hard worker and always has been. In the construction field, though, workers routinely change companies depending on which projects are hiring across the nation.

Suddenly, all of those monthly premiums that had been paid diligently every year were useless. There was no way to recoup the thousands of dollars lost and the exclusion meant they couldn’t take advantage of the protections the policy offered. This is but one more reason why reading the terms and conditions is so important.

The wife, meanwhile, has been unable to find work either after her company closed its doors last year. Not only is her husband’s profession not covered, it also, for all intents and purposes, nulls the entire policy. Now, they’re being forced to keep up the payments on a credit card with a $4,200 balance. Even making just the minimum payments is challenging.

You’re not alone, though. The Consumer Financial Protection Bureau is already receiving many complaints into these credit card insurance policies. In fact, in 2011, the government conducted a survey. The survey asked respondents about their experiences. Overwhelmingly, the answers were that that insurance is expensive, the terms are confusing and the benefits are like chasing a ghost. Currently there are no resources for those who feel they’ve been taken. CFPB hopes to change that.

For now, though, experts caution consumers about the confusing nature of the policies. For instance, if you wish to file a claim, odds are, you’re going to contact your credit card company. You likely won’t find much help, though. You’ll be sent to the insurance company where you may or may not get to speak with a representative.

There are even reports that suggest for every dollar spent, consumers are getting about twenty cents in benefits. And for those who are able to kick in the insurance policies, the companies are only required to make the minimum payments – which means the interest is accruing faster on larger balances. You might typically pay off any balance every month, thereby avoiding interest entirely. If the insurance policies kick in, you’ll likely see your balance grow as a result of those minimum payments.

So what do most financial counselors advise? It’s simple: they discourage consumers from buying into these policies. They simply do not deliver. Most agree it’s poor coverage and if you save that money every month and not touch it, should worse case scenario come full circle, there’s a good chance you’d be able to pay off the balance with what you’ve been saving anyway.

Do you have credit card insurance? If so, and if you’ve had to use it, would you recommend it? Tell us your story – we want to hear it.

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