Open a credit card account and you might walk away with more than just plastic.
Banks and their vendors heavily hawk card-related services, such as credit monitoring, that can add up to hundreds of dollars of year in fees.
But often consumers don't need these add-ons. In fact, they can take a few simple steps for little or no money and enjoy protections and access to information similar to what's promised by the services.
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Federal regulators have taken note — and action.
Regulators recently ordered Capital One Bank to refund about $150 million to 2.5 million customers who were pressured or misled by the bank's vendors into buying card products they didn't want or couldn't even use.
With consumers counting every penny these days, it makes no sense to pay for services of questionable value. Here are some card services you likely don't need:
Payment protection This product typically promises to cancel debt or suspend minimum monthly payments if the cardholder experiences a job loss or disability.
Monthly premiums are tied to balances. A U.S. Government Accountability Office report last year found that premiums ranged from 85 cents to $1.35 for every $100 owed.
CreditKarma.com says the average balance for Baltimore cardholders is around $5,100. That means the typical consumer here would pay $43.35 to $68.85 a month for payment protection.
"It's not cheap coverage," says Gerri Detweiler, director of consumer education for Credit.com, a card comparison site. "And part of the issue is when folks go to collect, a lot of times they run into various roadblocks in the fine print that make it difficult to collect."
Self-employed people may not be covered if they're not working, she says, or a claim may be rejected if the customer is behind on payments.
Payment protection has been highly profitable for banks, though. The GAO says that customers of the nine largest card issuers paid about $2.4 billion for payment protection in 2009, but received only $518 million in benefits.
This was one of the products pushed by Capital One's vendors and was the subject of consumer lawsuits. Some major banks have backed off it.
The latest to do so is Bank of America, which stopped selling payment protection to new credit card customers last month. Bank of America says customers already enrolled will continue to receive the service for six more months for free before it's canceled.
Spokeswoman Betty Riess says this is part of a strategy to streamline the bank's business and has nothing to do with a tentative $20 million settlement with consumers reached in July. These consumers sued the bank, claiming it enrolled them without their permission into a protection plan that had so many limitations that it was difficult or impossible for them to reap any benefit.
Consumers would be much better off depositing the money they pay for this service in the bank and establishing an emergency fund. In a matter of months, they could have enough set aside to either pay their balances if they fall on hard times or at least keep up with minimum card payments.
Also, just about every issuer offers payment plan or hardship programs — something the card companies don't tell you when marketing payment protection offers, says Curtis Arnold, founder of the card comparison website CardRatings.com.
"Even if you don't have that rainy day fund and are delinquent 90 days, your card company will work with you," he says.
Credit monitoring Some issuers and companies offer credit report monitoring as an identity theft protection service that often runs about $15 per month. The service is not worth the price, card experts say.
Card issuers have a legal responsibility to protect a customer from fraud, and they have developed sophisticated methods to quickly spot suspicious charges.