By the time the general credit card insurance market opens this year, many Americans will be paying a bit more than the standard 10 percent interest rate on their personal credit card.
That’s because many Americans are already paying the standard annual interest rate for the type of insurance they need.
But the rates on the other types of credit cards are much higher.
For example, for the life insurance type you need to have a $1,000,000 to $5,000 deductible.
So when the market opens, many consumers may be willing to pay a little more than that.
And if they don’t have to pay it, that means they won’t be in a position to spend their money, and their credit card payments won’t keep pace with inflation.
In fact, a study by Bankrate.com found that the average American would save more than $5.50 for every $1 spent on insurance if they paid the standard interest rate, according to a news release.
For the life coverage type, a consumer who bought a credit card with an annual fee of $10,000 would save $2,700 over the first three years of a 10-year term, according the analysis.
For a $5 million credit card, a typical consumer would save an extra $1.15 per $1 invested.
If the average consumer were to spend just $1 per month on life insurance, the savings would amount to $17,900 a year, Bankrate said.
For a $25,000 credit card and $10 million, savings would total $34,900.
If consumers were to invest $20,000 a year in insurance, a savings of $537 would be realized annually.
The average consumer would be able to save about $1 million annually by buying life insurance.
But the cost of the type you want depends on how much you have in savings and how much insurance you need, Bankrates.com said.
If you have a small credit card balance of $500, you can pay $1 for each $1 in savings you put in with a $500 annual fee.
If you have an annual interest fee of about $3,500, your average savings is about $11,000 annually.
And for an insured balance of at least $100,000 in annual contributions, the average savings would be about $8,200 annually, according Bankrate’s analysis.
The same analysis showed that a $10 billion individual retirement account, or IRAs, would pay $7,000 more annually if consumers invested in the type they wanted, and paid the same rate of interest as the standard life insurance card.
But if you have the same balance and want to save a lot, you may need to put more money in the account, BankRate said.
A life insurance company, on the market to buy insurance for $5 billion, would offer the same coverage as a typical credit card company, but the premium would be much lower, Bankriestep said.
The life insurance industry isn’t the only sector with higher costs than average.
For instance, a car insurance company would cost $10 a year less than the average insurance policy, and a personal insurance company could cost $9 a year more.