September 10th, 2009 by Reed Allmand 
As more credit card consumers face job losses, many credit card companies are encouraging credit cardholders to buy involuntary unemployment credit card (IUCC) insurance which will make your credit card payments while you’re unemployed. Sounds like a sweet deal; but what are the true costs?
Credit card consumers who buy involuntary unemployment credit card (IUCC) insurance are typically charged 1% of their balance per month in addition to the minimum payment requirement. For example, if a credit card consumer has a $2,000 balance, they would pay $20 per month plus their minimum balance which is usually around 3% or $60. If you’re expecting a job loss in a few months, signing up for this credit card insurance might be beneficial. However, if you didn’t suffer a job loss you would end up paying $240 per year for insurance you may never use, and that’s enough money to cover your credit card payment for 4 months.
Instead of buying IUCC insurance for your credit card, you may consider paying off your credit cards and/or saving enough in your emergency fund to cover all of your monthly expenses and debt payments for at least 3 months if you suffer a job loss. But if you do decide to signup for this insurance program read the fine print, usually these insurance products will not repay your credit card if you quit your job or if you are self-employed.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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