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Credit Card Repayment Protection Insurance

Information verified correct on December 3rd, 2016

Whatever you use your credit card for, you could enjoy it more knowing that your repayment obligations could be protected.

However, it’s important that you read the terms and conditions to understand your insurance, so you know what you’re covered for in every situation.

Payment protection insurance is insurance for your credit card that can help you make your repayments when you can't work.Whether you want to buy credit card payment insurance is your choice, and it is not an obligation when applying for a credit card. Usually this service is included in credit card packages.

Credit card payment protection insurance can you help you:

  • Cover your credit card repayments in the case you lose your job, or are unfit for work due to health issues
  • Pay your card balance up to a certain amount as defined by the credit card company if you die
  • Available to you if you hold an eligible card

What is payment protection insurance?

It is a type of insurance to help you cover your credit card repayments if something unexpected happens and you can't make them. This includes losing your job or becoming unfit for work. It also helps pay the balance owing if you die. Getting credit card repayment insurance will give you one less thing to worry about because if you find it difficult to pay back your credit card obligations, then it can ease any financial burden to you and your family.

How does payment protection insurance work?

This depends entirely on the insurer, but you can expect a waiting period after you lodge your claim. Usually the insurer can pay up to double the minimum repayment until you are fit to return to work.

How much does payment protection insurance cost?

Different insurers will have different premiums and rates, please read the Product Disclosure Statement (PDS) for all the costs. As an example, HSBC's payment protection premiums are listed below. The premium is 69c per $100 on the closing balance. If you have $500 at the time, you will pay $3.45 for that month.

Closing balance at the end of the statement periodMonthly Premium
$0$0
$100$0.69
$800$5.52 ($0.69 x 8)
$1500$10.35 ($0.69 x 15)

As a second example, Westpac credit card payment protection costs 52 cents for every $100 owing on your card. The monthly premium is dependent on the balance owing on your credit card at the end of the monthly cycle.

Closing balance at the end of the statement periodMonthly Premium
>$0$0
$1000.52
$800$4.16 ($0.52 x 8)
$1500$7.80 ($0.52 x 15)

By calculating the potential cost of having payment protection insurance, you can determine whether this feature will be useful or not. If having peace of mind is worth the premiums you pay, then it may be a good idea to get payment protection.

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What is covered under the payment protection insurance?

Again, each insurer will cover you for a different amount depending on the claims you make. Generally, the amount will be calculated on the balance you owe at the time and what type of claim you made. Most insurers will pay up to $50,000 if the cardholder dies. Here is what you can expect to be covered for:

  • Life events
  • Death of a partner or spouse
  • Redundancy/resignation
  • Disablement benefit
  • Accident death

Eligibility

This is also dependent on the insurer and their policies. However, as a general guide you need to be

  • Over 18 and under 65 years of age
  • Be employed on a part-time or full-time basis.
  • You may also need to be a permanent resident of Australia or hold a valid temporary visa, as well as have no default on your credit history.
    Each policy will outline what employment status they require for you to be eligible for this insurance.
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How do I apply for payment protection insurance?

There a few ways you can apply for payment protection insurance:

  • Call your credit card provider
  • Download an application form, available from your credit card provider's website
  • When you apply for a credit card, this is one of the extra features that you can choose to include

Credit card providers with payment protection insurance

Rates last updated December 3rd, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
St.George Vertigo Visa
Introductory offer of 0% p.a. for 18 months on balance transfers and 1% p.a. for 12 months on purchases, plus a low annual fee.
1% p.a. for 12 months (reverts to 13.24% p.a.) 0% p.a. for 18 months $55 p.a. Go to site More info
ANZ Platinum Credit Card - Exclusive Offer
Receive a low introductory offer of 0% p.a. on purchases for 3 months and 0% p.a. on balance transfers for 12 months. Also, enjoy an annual fee waiver in the first year.
0% p.a. for 3 months (reverts to 19.74% p.a.) 0% p.a. for 12 months $0 p.a. annual fee for the first year ($87 p.a. thereafter) Go to site More info
Emirates Citi World MasterCard
Receive 40,000 bonus points and enjoy up to 10% off Emirates flights when you meet the spend requirement. Also pay a reduced annual fee for the first year.
20.99% p.a. 0% p.a. for 9 months $149 p.a. annual fee for the first year ($299 p.a. thereafter) Go to site More info
HSBC Platinum Qantas Credit Card
Receive 60,000 bonus Qantas Points on eligible spend within 3 months. Enjoy access to premium benefits and complimentary insurance.
19.99% p.a. $199 p.a. Go to site More info
American Express Essential Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card. Also enjoy a 0% p.a. balance transfer rate for 12 months.
14.99% p.a. 0% p.a. for 12 months with 1% balance transfer fee $0 p.a. Go to site More info
HSBC Platinum Credit Card
HSBC Credit Card repayment insurance is an optional extra available on HSBC credit cards that provides easy, low cost insurance cover.
19.99% p.a. 0% p.a. for 15 months $149 p.a. Go to site More info
Citi Clear Platinum Card
CardProtect from Citibank can assist with account repayments when you experience unexpected circumstances
0% p.a. for 9 months (reverts to 14.99% p.a.) 0% p.a. for 9 months $99 p.a. Go to site More info
Citi Simplicity Card
Take advantage of the 0% p.a. for 9 months offer on balance transfers, a low interest rate on purchases, an annual fee waiver for life, plus 5% cashback on retail purchases.
19.99% p.a. 0% p.a. for 9 months $0 p.a. Go to site More info
St.George Amplify Platinum
This card features a 30,000 bonus points offer, introductory interest rates on balance transfers and purchases and an annual fee waiver for the first year.
1% p.a. for 12 months (reverts to 19.49% p.a.) 0% p.a. for 18 months $0 p.a. annual fee for the first year ($99 p.a. thereafter) Go to site More info
ME Bank frank Credit Card
Enjoy a low and consistent interest rate on purchases and cash advances, combined with no annual fee.
11.99% p.a. $0 p.a. Go to site More info
American Express Platinum Card
Receive 100,000 Membership Rewards Bonus Points when you meet the minimum spend requirement and earn up to 3 points per dollar spent. Gain access to travel insurance, $300 Platinum Travel Credit every year and access to 900 VIP airport lounges.
$1,200 p.a. Go to site More info
ANZ Platinum Credit Card
Enjoy platinum card benefits with $0 annual fee in the first year and complimentary overseas travel and medical insurance.
19.74% p.a. 0% p.a. for 18 months with 3% balance transfer fee $0 p.a. annual fee for the first year ($87 p.a. thereafter) Go to site More info
ANZ Low Rate
$100 Back plus 0% p.a. for the first 6 months on purchases from approval.
0% p.a. for 6 months (reverts to 13.49% p.a.) $58 p.a. Go to site More info
Westpac Altitude Black - Exclusive Offer
Earn 100,000 bonus points when you spend $5,000 on eligible purchases, choose between two reward programs offering Altitude or Qantas Rewards and receive premium cardholder benefits.
20.24% p.a. $395 p.a. Go to site More info

Shirley Liu

Shirley is finder.com.au's publisher for banking and investments. She is currently studying a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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2 Responses to Credit Card Repayment Protection Insurance

  1. Default Gravatar
    jill | March 11, 2015

    I have been a carer for my husband for about eighteen months and don’t get any payments for this or work at all but have insurance on my credit card how can I start making payments on this card

    • Staff
      Jonathan | March 11, 2015

      Hi Jill, thanks for your inquiry!

      To allow me to assist you further could you please inform us to which credit card you are using?
      Credit card repayments can usually be made by visiting a local branch, BPAY, cheque or phone.

      Cheers,

      Jonathan

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