Balance Protection

AAA

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.

INVESTOPEDIA EXPLAINS '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. Activity Charge

    A fee charged to cover the servicing costs of an account. An ...
  2. Overdraft Protection

    A line of credit that banks offer to their customers to cover ...
  3. Bank Fees

    Many banks charge nominal fees for various services, such as ...
  4. Annual Percentage Rate - APR

    The annual rate that is charged for borrowing (or made by investing), ...
  5. Credit Card

    A card issued by a financial company giving the holder an option ...
  6. Credit Card Authorized User

    Definition of an authorized user of a credit card.
Related Articles
  1. 15 Insurance Policies You Don't Need
    Insurance

    15 Insurance Policies You Don't Need

  2. Credit, Debit And Charge: Sizing Up ...
    Credit & Loans

    Credit, Debit And Charge: Sizing Up ...

  3. Take Control Of Your Credit Cards
    Credit & Loans

    Take Control Of Your Credit Cards

  4. Understanding Credit Card Interest
    Retirement

    Understanding Credit Card Interest

comments powered by Disqus
Hot Definitions
  1. 80-10-10 Mortgage

    A mortgage transaction in which a first and second mortgage are simultaneously originated. The first position lien has an ...
  2. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific ...
  3. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  4. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  5. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center