Mike Cherry of Consumer Credit Counseling joins us to talk about the pros and cons of getting credit card insurance.  (watch the video to see his interview)

If you own a credit card you have probably been asked by the company if you would like to add credit insurance.
Most are unfamiliar with this type of insurance and either decline it or accept it automatically without knowing if it is the right type of insurance for their needs.
As with all insurance, determining need is different from person to person because of our different lifestyles and obligations.
Credit insurance may be beneficial to some but just an unneeded cost for others depending on one's situation.
Knowing what credit insurance is and the different types can help you make an informed decision.

Credit insurance is a type of coverage designed to pay off the minimum monthly payment in the event that a credit user cannot make their payments.

The average rate of credit insurance is around 75 cents for each $100 of loan coverage per month.
This means that if you carry a monthly balance of $3000, the insurance premium would cost you around $22 each month. That may not seem like a lot, but small sums add up: $22 dollars a month costs you $264 a year.

A strong debate exists regarding credit insurance.
Supporters of credit insurance (usually those who offer it) Say that it offers great protection for some credit users.
For instance, a consumer who carries a large debt and who is in poor health may definitely benefit from the advantages of credit insurance should they become too ill to work.

Critics argue that it's a grand money maker for companies that offer the insurance, but a bad deal for consumers.
They make a case that a life insurance policy would cost the consumer less and pay out more benefits. Indeed, the consumer credit insurance association notes that people who earn a lower income and don't have other types of insurance are the people who tend to use credit insurance the most.