Industry experts warn that the perks and added extras that are promised as a part of the deal along with your credit card are "of little use" and should not determine your choice of card.
The last few months have seen Halifax, Sainsbury's Bank, Lloyds TSB and HSBC withdraw purchase protection cover on their cards. Meanwhile, Barclaycard has pulled back all other insurance benefits. This appears to be a trend these days as card providers are withdrawing traditional perks which include, purchase protection insurance and travel accident cover. Analysts say these changes are to be expected as the cost of offering the above-mentioned benefits has spiraled following changes in insurance rules.
Nick White, head of personal finance at uSwitch.com, had this to say, “Credit card providers have historically used perks, such as car breakdown cover and annual travel insurance, to entice people into applying for their cards. But now that many providers have withdrawn the more valuable benefits, those remaining are, in reality, of little worth," He added that only a limited number of cards had a tangible value - in terms of discounts. "If you go on holiday frequently or buy CDs, these might be also worthwhile. One thing to be aware of, however, is that these discounts are usually only available at selected places, and if you had the inclination to shop around (especially for holidays and flights) you could probably find bigger discounts,” he said.
But credit card companies beg to differ. The changes are designed to benefit the consumer & not to save money for themselves, they claim.
Both Halifax and Barclaycard issued statements to MyFinances.co.uk, in which Halifax spokesperson responded by saying, "Over the last five years the number of claims on these [insurance] policies can be counted on your fingers,"
The Managing director of Barclaycard UK, Peter Crook had this to say, “We want to offer services which appeal to as many of our cardholders as possible and more importantly, which provide them with the right support and protection when it's needed the most."
Nick White, had a final comment, “As a general rule, consumers should look to see if they are getting the best package from their provider for their lifestyle. If you rarely use any of the perks included, think about what you actually require from a credit card, and consider other types of rewards that credit cards offer such as cashback or reward points. It's easy to switch if your current card does not meet your needs."
Posted
on : Sun, 13 Mar 2005 00:00 GMT | Credit Cards News
By : Mark Richardson
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