Named plaintiff Elizabeth Olson alleges that Bon-Macy's charged her $79.99 for annual credit card insurance she neither approved nor ordered. The action alleges that the charge for insurance is in addition to annual credit interest payments. The insurance offered is apparently a type often referred to as “ loss protection” insurance. The U.S. Federal Trade Commission generally advises consumers not to purchase this type of credit card insurance because federal law already limits consumer liability for unauthorized charges to a maximum of $50 per transaction. Consumers who have been victimized by unauthorized card users should follow their credit card issuer's procedures for disputing unauthorized charges. Apparently, it is this type of coverage that the lawsuit alleges that Bon-Macy’s has been selling to its cardholders.

Another type of credit insurance is a mix of life, disability and unemployment coverage. It is intended to cover your minimum monthly payment if you can't pay because of a job loss or disability, and to pay off all, or most, of your balance if you die. Your premium on this type is usually fixed by what your last bill was, because the premium covers only what you owed at that time. All credit insurance is voluntary Rates are regulated by each states’ insurance commissioner, so you can check to make sure you aren't getting ripped off.