Which?: Britons do not understand PPI's role in credit

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Which?: Britons do not understand PPI's role in credit

Wed 10th Sep 2008

Over a million people wrongly think that taking out payment protection insurance (PPI) will increase their chances of securing credit, according to new research from Which?.

Of the 9.8 million Britons who have credit cards with PPI, 13 per cent believe that buying PPI was either a requirement of the deal or that they were more likely to be approved for the card if they had it.

But Doug Taylor, personal finance campaigner for Which? said that credit card PPI is "a useless product, expensive and poorly designed".

He said it did not offer the protection required and that people should instead seek independent financial advice to protect their finances "as a whole".

PPI is sold alongside such products as credit cards and loans to cover repayments if people lose their income through illness or unemployment.

Credit card PPI often covers only the minimum monthly repayment, meaning the balance may never be paid off.

British Insurance recently warned that people giving up work to become carers were missing out on PPI.

While insurers often provide carer cover in mortgage PPI, few people understand it and fail to claim.

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