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. Cardholder Agreement

    A printed booklet a credit cardholder receives that contains ...
  2. Additional Cardholder

    An added or secondary user added to a credit card account by ...
  3. Billing Statement

    A periodic report that credit card companies issue to credit ...
  4. Credit Card Balance

    The amount of charges, or lack thereof, owed to the credit card ...
  5. Sales Draft

    A record indicating that a cardholder has made a purchase.
  6. Payment Protection Plan

    An optional service that lets a disabled or unemployed consumer ...
Related Articles
  1. Personal Finance

    Credit Card Review: Citi Double Cash

    Learn about the Citi Double Cash credit card and its simple cash back program that pays a combined 2% rate on every card purchase.
  2. Personal Finance

    Why Making Minimum Payments Gets You Nowhere

    Getting out of debt can be difficult, but paying off a minimum balance each month only makes things worse.
  3. Personal Finance

    5 Credit Cards For the Super Rich

    Understand the difference between an average credit card and an elite credit card for the wealthy. Learn about the top five credit cards for the super rich.
  4. Personal Finance

    0% Balance Transfers: Can You Beat the Odds?

    Before you accept that 0% balance transfer offer, understand why you got it and who will probably profit most. Only accept if you can beat the odds.
  5. Personal Finance

    How Credit Card Balance Transfers Work

    The pros and cons of credit card balance transfers.
  6. 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.
  7. 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.
  8. Personal Finance

    Univision MasterCard Prepaid Card: What You Need to Know (MGI, WU)

    The Univision MasterCard prepaid card markets itself as a safe alternative to cash, but competing cards may offer better value for consumers.
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. Because I missed a few credit card payments, the issuer raised my interest rate from ...

    You should first check that your credit card company is operating within your rights as a card holder. The U.S. Congress ... Read Answer >>
  3. 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 >>
  4. How does the Best Buy credit card work?

    Learn how a Best Buy Visa credit card can provide consumers with 5 to 6% cash back in its stores and online, and provides ... Read Answer >>
  5. What are some common catches that come with credit card reward programs?

    Read the fine print of credit card cash back rewards programs before assuming they are an easy way to cut down on credit ... Read Answer >>
  6. How can I avoid paying unnecessary credit card fees?

    Examine different strategies for reducing fees on credit cards. Learn about the Consumer Financial Protection Bureau and ... Read Answer >>
Trading Center