Definition of Balance protection:
A type of insurance coverage that will make minimum monthly payments on a credit card account if the cardholder becomes injured or unemployed. Balance protection coverage is offered by credit card issuers. The premium for the coverage is computed as a percentage of the balance, and is added as a fee on the monthly statement.
Balance protection is an insurance product sold to credit card users. It is intended to protect policyholders from the risk that they will be unable to cover their minimum monthly payments due to specific circumstances. Credit card companies offer balance protection to cardholders for a fee and will cover monthly payments if the individual becomes disabled, unemployed, or dies. Importantly, these circumstances are limited in nature and must be explicitly included in the insurance contract—with illness or sudden job loss being the most common examples.
The term “balance protection” refers to a form of credit card insurance. Although the exact terms vary depending on the card, it generally covers only the minimum monthly payments on the card’s outstanding debt. This coverage is activated if the cardholder is unable to make their payments due to illness, job loss, or other circumstances laid out in the insurance contract.
How to use Balance protection in a sentence?
- Although balance protection can protect the customer from defaulting on their credit card debt, it does not prevent against the growth of that debt, since it typically does not cover more than the card’s minimum monthly payment.
- This protection only applies if the cardholder is unable to pay due to specified circumstances, such as illness or sudden unemployment.
- Balance protection is a type of insurance offered to credit card users, which promises to pay off the minimum monthly payment associated with the card’s outstanding debt balance.
Meaning of Balance protection & Balance protection Definition