Credit Card Errors

Tricky Insurance Pays Off by Scott Bilker
Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Scott,
I found out after renewing a credit card that I had been paying for insurance that I wasn't aware of. This insurance would pay benefits in case I died or became disabled. I had the card since 1997 and became disabled in 1998 (Parkinson's). I called a credit card rep and she advised me to put in a claim. She also stated if there were any other balances to transfer I could transfer them and clear them up also. Could this be true?
--Alan

Alan,
Thanks for writing! I'm sorry to hear about your disability.
It's very common that people pay for something on their credit card that they don't even know about. It's usually some type of insurance, as in your case, or a buyer's advantage program, or other membership package. This happens because people are enticed to sign up for the "free trial" but then forget to cancel after the trial period. This is probably what happened in your case.
Despite having previously paid for insurance that you were unaware of, it's going to work out because you can actually put in a claim. It sounds like they're willing to cancel all your debt with the claim. I don't know the details of the insurance but that's what I'm getting from your question.
The only thing I'm wondering about is that the credit card rep advised you to transfer your balance to the card and then put in a claim. This doesn't make sense because the bank would be giving you money then expunging the debt.
I guess it's possible that the rep was giving you an "insider tip" but I would still be cautious. Either way, if their transfer rate is better than your other cards then it's certainly smart to transfer your balances to this card.
To be sure of the details you must get a copy of the original policy. You many not have it so ask them to send you a copy. Read it carefully before you do anything. You don't want to be tricked into voiding the possibility of using the insurance to your maximum advantage.
I would do the transfer and put in a claim, as instructed by the rep. If they forgive the debt--fantastic! If not, then keep the debt as long as the transfer with them is the best option you have.
Good luck and please let me know what happens!
Regards,
Scott

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