According to MoneyExpert.com, PPI can be “an expensive add-on” that can make consumers accumulate excess credit card debt, with a £3,000 balance charging an annual fee of up to £540.
Sean Gardner, chief executive of MoneyExpert.com, said that for those who do want to take out PPI, there are other options than those offered by credit card providers: “Many people don’t realise that they can purchase PPI with any major insurance broker – it doesn’t have to be an expensive add-on to their credit card.”
However, PPI has been labelled as “overly complex” by the Office of Fair Trading (OFT) and last month Which? told the Mail on Sunday that it does not “believe that PPI is a suitable option for most people”.
For while PPI is meant to guarantee repayments on credit card debt due to illness or injury, it has a low claim rate and other drawbacks.
Because of this the OFT is investigating the industry and many people may be better off with sound advice and debt management to cover them during illness.