Most people today have at least one credit or debit card, often more. Plastic cards have easedtransactions all over the world by reducing the need to carry large amounts of cash. However, like carrying cash is a risk, losing your cards is also a risk.

What should you do if you lose your wallet containing all your credit and debit cards? More often than  not, you will have to call all the card issuers and the banks to block your cards. And if any fraudulent transactions take place while you are in the middle of informing the banks, then you are in trouble. You will have to go through the tedious process of trying to get those transactions reversed.

Fortunately, there is a simple solution in the form of a useful financial product known as the Card Protection Plan or CPP  - basically, an insurance plan for your credit and debit cards.


How does CPP work?

You pay a small annual premium to buy insurance for all the cards that you wish to cover – including your debit cards, credit cards, and membership cards. The Card Protection Plan that you choose offers you protection against any loss, theft, or other fraudulent transactions conducted through your cards. The premiums are generally less than Rs 1,000 a year.

A great advantage is that when you lose one or all of your cards, you have to just call up the  service provider's helpline and lodge a claim, instead of dialling and dealing with multiple banks. It is then the insurance provider's responsibility to get  in touch with all the concerned banks (as per the cards registered with them) and initiate blocking and cancellation of cards immediately on your behalf. It  is also liable to pay for any expenses arising out of any unauthorized transaction conducted through your lost cards.

Another benefit of having a CPP is that it not only pays for unauthorized transactions after you report your cards as lost, but also for those that have taken place seven days before such a report was made. This provision allows any disputes over the timing of the fraudulent transactions to be averted and makes the CPP all the more attractive as a retail-insurance product.


It totally makes sense for everybody to purchase a CPP for a small premium

There is little doubt that a CPP is a unique product that protects against any loss arising from loss  of or theft of your cards. The small premium that you pay goes a long way to secure your peace of mind, making it very worth it.


Things you need to know before opting for a CPP

You should try to find out the tie-ups that the CPP issuer has with all the banks. It is possible that all banks may not have tie-ups with all CPP issuers.

None of the CPPs will cover an unlimited amount of liabilities. So, you need to check with the CPP provider about the maximum loss that the plan you choose covers. Different CPP providers have different plans having different eligible maximum loss amounts.

If your lifestyle suggests that your chances of losing cards are high (for example, if you are frequent traveller) then go ahead and invest into a CPP to ensure that your losses are covered. But before you do so, it is best that you get all your facts right and evaluate your options carefully. 

 

Disclaimer: Copyright Kotak Mahindra Bank Ltd.

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