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CREDIT CARD COMPANIES TO LOSE COSY MONOPOLY ON LUCRATIVE CARD PROTECTION MARKET RACKET

*Specialist Insurance Provider Paymentcare launches UK’s first ever stand-alone policy specifically designed to cover credit card debt

*Up to four times cheaper than major providers such as Morgan Stanley

*Card firms accused of trading on consumer ignorance with rip off cover

THE MONOPOLY enjoyed by UK credit card companies in the billion pound payment protection insurance (PPI) market is about to end.

Millions of credit card borrowers can benefit from Paymentcare’s stand-alone LASU policy (Life, Accident, Sickness and Unemployment), which will protect monthly repayments on card balances in the event of the card holder being unable to make payments because of not being able to work.

The cheapest in the UK by quite some margin – nearly four times less than the astronomical rates charged by MBNA (see table) - Paymentcare’s new deal is designed to turn this credit card company-dominated loan protection market on its head.

“Credit card firms con customers in two main ways with card protection insurance – often by offering the first month’s cover free to get them hooked and then by playing on an average price point of only 79p per £100 of outstanding balance. It’s not until you examine what you actually get for your money that you realise what a con it is compared to other payment protection policies, such as mortgage payment protection insurance.” said Paymentcare MD Shane Craig.

“As our table (see below) shows, it is the big players like MBNA – which dominates the affinity card market as well as the standard card arena – that are cleaning up when it comes to card payment protection insurance.”

“Huge charges like these are all the more galling when also levied by the likes of Virgin, which is basically an MBNA card with Virgin branding,” said Craig.

“And when you think that firms like Virgin spend millions on marketing themselves as groovy, cool companies appealing to younger cardholders, it strikes me as arch hypocrisy to levy shatteringly high charges on payment protection.

“Morgan Stanley, currently throwing huge sums of money at promoting its credit card range, are the worst offenders for making customers pay through the nose for this kind of cover by imposing extortionate premiums. But that is all going to end as consumers wise up to the fact they are being taken for a ride,” said Craig.

As well as being the cheapest on the market at just £0.65 per £100 of outstanding balance, Paymentcare’s plan is supremely better and more flexible, allowing borrowers to cover the outstanding balances on as many credit cards as they wish, from £1,000 to £5,000.

“It’s simple and transparent, like all Paymentcare policies,” added Craig. “The policyholder selects the level of cover that’s closest to their average monthly outstanding balance.”

“Assume an outstanding balance of £5,000 on your credit card(s), and like the best of the card companies, we pay 10 per cent of the cover selected - £500 per month - for five months. And, if you still had to claim in month six, then Paymentcare would pay an additional £2,500 off the outstanding balance on the cards.

“And, unlike the credit card sharks, there are no premiums to pay while the cardholder is in claim. It’s an all-round win situation for consumers,” said Craig.

PAYMENTCARE CREDIT CARD PROTECTION AT A GLANCE

-Lowest cost credit card cover per £100 of monthly benefit at only £6.50

-True protection when it is needed most - unlike every other credit card payment protection insurance, policyholders do not pay for the insurance during a claim

-Should the claim last for more than 5 months, Paymentcare will clear the remainder of the outstanding balance cover limit in month 6

Virgin£24.00
Morgan Stanley£25.33
Lloyds TSB£15.80
MBNA£24.00
Paymentcare£6.50