Sometimes "really good deals" can cost you a lot of mone...

DOLLARS AND SENSE

May 09, 1993|By Knight-Ridder News Service

Sometimes "really good deals" can cost you a lot of mone. Here are some examples:

Credit card insurance:

The pitch: You pay about $25 for a company to contact all your credit card issuers in the event your cards are stolen and to guard against being billed for unauthorized purchases.

By federal law, the institution that issued you the card can charge you up to only $50 for unaauthorized charges, and then only for charges made before you notified it. So, if your card is lost or stolen, report it immediately. Some institutions will even waive any charges to stay in your good graces.

# Caredit insurane:

The pitch: Before they'll lend you money, some financial institutions urge you to buy credit life or disability insurance. Their aargument is that if you die or become disabled, this insurance will pay off the loan.

Unless life or disability insurance is too expensive because of your age, you don't need this coverage. Instead, determine if you already have enough money to meet your bills in the event of death or disability - if you don't, buy more life or disability insurance. Term life insurance will likely be cheaper than credit insurance, and you have the option with term life to pay off your loan or any other bill. With credit insurance you must use the moneyfor a specific loan.

$ Service contracts:

The pitch: You've just bought an exepensive television (or VCR, CD player, refrigerator, etc.) and you're offered an extra warranty - usually for one to three years - that can cost $100 or more.

The odds that your new purchase will break down in the first year or so are small. Besides, most electronic products and appliances come with 90-day warranties. Chances are good that if you bought a lemon you'll know it within the mormal warranty period. Instead of buying the extended warranty, put the money in a savings account earmarked for repairs.

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