Many of the UK’s biggest credit card providers are still selling payment protection insurance (PPI) on their credit cards.
Despite the Competition Commission’s plans to ban point-of-sale PPI on most credit products and the Financial Ombudsman Service’s new figures showing over 80% of PPI complaints being settled in the consumer’s favour, big-name providers currently selling credit-card PPI include Egg, Tesco and Capital One.
How much does credit card PPI cost?
PPI covers repayments on credit products such as credit cards and personal loans if the borrower is unable to cover them due to illness, accident, unemployment or (in the case of some policies) death.
Most credit card providers charge around 79p per month per £100 borrowed on the credit card. Based on an average balance of £5,000, PPI could cost you over £470 a year.
Some providers market their PPI product as part of a ‘lifestyle protection’ policy, which may also include other cover at key ‘life stages’, such as the birth of a child. Providers who offer ‘lifestyle protection’ include MBNA, Virgin, The AA and American Express.
Other brands, including ASDA and Ryanair, offer variations such as ‘Balance cancellation cover’, which pays the minimum payment on your card for a set period, before potentially clearing your balance altogether after 90 days if you are still unable to work or if you die. The ASDA and Ryanair cover costs £1 per month per £100 covered – equivalent to a hefty cost of £600 a year on an average balance of £5,000.
Mis-sold PPI and reclaiming your cash
Which? has also campaigned strongly against the mis-selling of PPI, which has caused outrage in recent years.
Some consumers who did not need, did not want or would not be covered by PPI in the event they tried to claim have been sold the product by lenders – in some cases, without even realising it.
If you think you’ve been the victim of PPI mis-selling, be sure to check out the . It features a short PPI video that explains how to work out whether you can make a claim, plus a free online PPI claiming tool.
If you think you have been mis-sold PPI, visit which.co.uk/PPIclaim to start your complaint using our online complaint tool.
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