'Millions thrown away' on credit card PPI

Around 1.3 million people have taken out payment protection insurance (PPI) on their credit cards in the mistaken belief that this would help their application.

Research from Which? has revealed 13 per cent of the 9.8 million people in the UK who have credit cards with PPI attached wrongly believed signing up for the insurance was part of the deal, or that their application was more likely to be accepted.

PPI is sold alongside credit cards, loans, finance agreements and mortgages to cover repayments if people are off work because of illness or unemployment.

However, credit and store card PPI often only covers the minimum amount that must be paid each month, meaning your balance may never reduce.

Doug Taylor, personal finance campaigner at Which?, said: "Credit card PPI is a modern day snake oil - it's a useless product, expensive and poorly designed.

"In this time of economic uncertainty, people are effectively throwing away £970 million each year, when they should be encouraged to seek independent financial advice about protecting their finances as a whole.

"No one should have to take out PPI on their credit card. Credit card PPI is the elephant in the room that can no longer be ignored."

If you think you may have been missold PPI, Which? recommends you try to claim your money back.

If your adviser did not make it clear that the insurance was optional, did not check that you would be eligible for a payout if you claimed, or did not make it clear whether the cost would be added to the loan, you may be able to make a complaint and get your money back.