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I’m a Hard Working Blue Collar Worker And I Can’t Pay My Bills. – Steven

“Dear Steve,

A hard working blue color man, worked for 30 years before getting injured on the job May of 08. I am now considered disabled. Besides trying to save my home from foreclosure, Capital One is suing me for nonpayment; I received papers from the sheriff saying I have 20 days to respond.

Seeing how I am disabled and was injured on the job and not able to work , am I still libel for these payments or is there some kind of insurance on credit cards?


Dear Steven,

Credit protection insurance is available on credit cards but I don’t suggest it. I don’t like it for two reasons, it rarely pays off and it is expensive.

An offer I saw yesterday was $0.89 per $100 of debt, monthly. So if you are carrying a $10,000 of debt you are paying that it will cost you $89. You are much better off putting $89 a month in a savings account and letting that grow.

Insurance is priced so that the company receives more in premiums than it costs to pay out claims. That’s how they make a profit. Also, the insurance company knows that not every person will make a claim or be eligible for a payout. So let’s say 1% of claims are ever paid out over a five year period. That is reasonable. For every 100 similar people are paying for this type of insurance the company will have collected $534,000 over five years and maybe paid out one $10,000 claim.

Credit protection insurance is a huge money maker for the banks and that’s why they push it.

If you were hurt on the job you should get yourself a lawyer to protect any claims you might have for wok comp and possibly SSDI, depending on your disability.


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About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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