DEFINITION of 'Balance Protection '

The optional coverage on an existing credit card account. Typically, the fee for the balance protection is a specified percentage of the balance on the card and is added as a fee to the monthly statement. The balance protection coverage is offered to cover minimum monthly payments (and in certain cases a higher amount) in the event that the cardholder is injured or becomes unemployed.

BREAKING DOWN 'Balance Protection '

The optional balance protection will provide minimum monthly payments to insure that the account does not become default in the event that the cardholder becomes injured or unemployed. Balance protection agreements vary from bank to bank; it is recommended that cardholders read "the fine print" to determine if the coverage would be beneficial.

RELATED TERMS
  1. Additional Cardholder

    An added or secondary user added to a credit card account by ...
  2. Credit Card Balance

    The amount of charges, or lack thereof, owed to the credit card ...
  3. Minimum Payment

    The smallest amount of a credit card bill that a credit card ...
  4. Plain Vanilla Card

    A basic credit card with no special features or perks and no ...
  5. Terms And Conditions (Credit Card)

    A formal statement of the rules and guidelines that govern the ...
  6. Average Daily Balance Method

    A credit card accounting method where interest charges are based ...
Related Articles
  1. Personal Finance

    Credit Card Review: Blue Cash Everyday Amex (AXP, KSS)

    Read about the Blue Cash Everyday Amex card, and learn how it saves cardholders money on groceries, gas and other household purchases throughout the year.
  2. Personal Finance

    3 Best Credit Cards for Balance Transfers in 2016

    Find out which credit cards offer the best balance transfer opportunities in 2016, including the longest introductory periods and the lowest costs.
  3. Insurance

    How Much Car Insurance Do I Need?

    Find out to determine how much car insurance you actually need with this overview of the different types of coverage available in your policy.
  4. Personal Finance

    Take Control Of Your Credit Cards

    The plastic in your wallet doesn't have to hurt your finances. Learn how to manage it responsibly.
  5. Personal Finance

    Debit or Credit Card: Which to Use for Car Rentals

    Before you rent your next car, think twice about purchasing the added insurance if you're using a credit card.
  6. Personal Finance

    Should You Use Credit Cards To Fund Your Business?

    We give you 4 reasons to consider using a credit card instead of a business loan to fund your business, and how to be smart about it.
  7. Investing

    How American Express Counts on Your Profligacy (AXP, MA)

    Consumers like novelty, reliability, variety, and other subjective qualities. But what really keeps them coming back to American Express is convenience.
  8. Personal Finance

    Credit Card or Cash?

    Credit cards are convenient to use, but not always the best choice. Here are 5 times you shouldn't pay with a credit card – and 5 times you should.
  9. Personal Finance

    Credit Card Review: Chase Slate

    Take a closer look at one of the most popular balance-transfer credit cards on the market: the Chase Slate card with a 0% balance transfer fee.
RELATED FAQS
  1. How is the minimum payment on a credit card calculated?

    Even when minimum payments are low, consumers should still aim to pay off credit card balances every month. Read Answer >>
  2. Are balance transfers worth it?

    Balance transfers on credit cards are often a way to save a lot of money over the short and medium term. Read Answer >>
  3. How can you pay your Walmart credit card?

    Learn about the Walmart credit card and how to make payments by a check, online, at Walmart and Sam's Club stores, or over ... Read Answer >>
  4. How do I check the balance on my prepaid credit card?

    Check your prepaid credit card balance quickly using your phone or the Internet. Keeping track of your balance is easy and ... Read Answer >>
Trading Center