The warning comes from Nick Kirwin, head of protection marketing and product development at Abbey.
Kirwan said: “When people move into a new house one of the first things that happens is that credit card takes a whack, especially for all those unforeseen expenses. They need to ensure that all these payments can be met,” he continued.
“ People should make sure they have an extra 20 per cent of cover to ensure that all their repayments can be met should the worst happen. Most people simply do not have savings to fall back onto,” he commented.
CML figures, published a fortnight ago, showed credit card debt has increased five-fold over the last ten years.
Rob Clifford, managing director of national franchise brokerage, Mortgage Force, agreed. However he cautioned: “There could be the danger of an accusation of mis-selling, if a client felt they had been sold too much cover.”
He went on to say it depended on a client's perceived value of the peace of mind extra cover could bring.
