Have you checked whether your revolving credit card has any associated insurance?


Sometimes, the monthly fee you pay for using your card’s credit includes the cost of an insurance policy you might not remember being told about when you took out the card. However, the terms and conditions of payment protection, accidents or any other incident subject to the insurance policy must be provided when you take out the card.

When the insurance is not for free, the insurance premium increases the APR of the transaction. It is therefore important to ask about it beforehand. Also, when choosing the monthly fee you will pay, it is advisable to verify that, in addition to covering interest, commissions and insurance expenses, it will allow you to pay off part of the drawn credit and avoid an unnecessarily lengthy repayment period.

Usually, banks consider the insurance policy to be optional, i.e. you can decide whether to take it out or not. That is why it is not included in the Standard European Consumer Credit Information (SECCI), which states that the bank need only specify whether it is compulsory in order to obtain the card.

While taking out these insurance policies may be advantageous for you, you should carefully consider doing so and not let the circumstances decide for you. Often, due to inadequate or hasty marketing (owing to the intrinsic immediacy of consumer good sales) or to a card application form where the relevant box is already ticked, the decision may be taken for you. Thus, the insurance may be taken out without your being fully aware of it and without having been duly informed.

Whether or not you want to take out insurance should be up to you. That is why you should make sure, prior to signing the contract, that this is the product – and its attendant terms and conditions - you really want.

Remember that, if this is not the case, you have the right to withdraw from the contract within 14 calendar days of signing it or from the date in which you received the contractual terms, if later. This will render the contract null and void and the lender must be duly notified. The procedure to exercise the right of withdrawal should not be more costly or complex than the procedure for signing the contract. This information can be found both in the SECCI and in the contract.

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