You see them advertised by your bank or credit card company—special credit card or debit card "clubs," memberships and other extras you can sign up for, sometimes free of charge, but often for a fee added to your account or credit card bill. These offers may include services that monitor your credit reports for possible signs of fraud or identity theft, auto club membership and other travel programs, and even discounts on health care products and services. The ads make it all sound so good... but is it a good deal for you? FDIC Consumer News offers the following suggestions:
Read and understand the fine print before agreeing to anything. Federal laws require credit and debit card issuers to disclose the fees and terms of their programs, including clubs. But too many people don't review this information until they need a particular good or service, and by then it may be too late to take full advantage of the program. "Even if something is being offered for free, you still should understand the terms of the program before you sign up," says Joni Creamean, a Senior Consumer Affairs Specialist with the FDIC. She notes, for example, that an extra service may be available free for a year, but if you don't cancel after that, the cost of the program for the next year automatically could be charged to your account, and you may end up paying for a program you no longer want.
Think about whether you really need the service and, if you do, shop for the best deal. Example: If you travel a lot by car or airplane, you may benefit from programs that offer emergency roadside assistance or lost luggage insurance. But first research whether you already get travel protection under a different program or if you can buy it for less elsewhere. Also, services that monitor your credit reports and alert you to potential fraud may be beneficial but other good options may cost less.
If you sign up for a program, make sure it continues to meet your needs. Keep copies of the application you sign and send in as well as any promotional literature and updates you receive. "This documentation may be crucial to your case if the program doesn't fulfill its disclosed purpose," Creamean explains. And, if you decide to cancel, be sure to follow the procedures specified by the company in its literature in order to avoid delays that can trigger membership or other costs.
