Financial Products Which Make No Sense

by David Bakke

In today’s ever-changing financial world, what with credit card industry reform, fear of identity theft, and millions of other “new” things occurring, it seems as though “big business” and the banking industry in particular, are continually trying to come up with ways to separate us, the American public, from our hard earned money. And in a  lot of cases, they are trying to separate us from our money without offering us much of anything in return.

Every Time We Turn Around

In a lot of ways, you can’t even walk down the street any more without somebody trying to sell you something that doesn’t offer much in return. A lot of things comes to mind when I think of this, but there are a few products or plans or whatever you want to call them that simply do not make any sense to me. And offer little to nothing in return to us the consumer. I thought I would discuss a few of them with you here.

Credit Report Services

I am sure that by now you’ve all heard of the million services out there which offer to monitor your credit for you. They make great claims of sending you your credit report to you for free each and every month, and I’d imagine they also offer all kinds of support and services in the event of identity theft. I say “I’d imagine” because I’ve never really looked into any of these programs.

The reason that I haven’t is because they make no sense to me, and are a complete waste of money in my opinion.

Let me explain. First, you can get your credit report for free one time each year from each of the three major credit reporting agencies. Therefore, if you set up a schedule, you can get your report for free three times per year. I don’t really think that you need to get your credit report any more frequently that that. The only time I really need to review my credit report is before I am about to make some large purchase like a new home or a car, and that is not very often. Other than that, I review my credit report simply for double-checking for errors and things like that.

Next, and this is something that I don’t think a lot of people realize. These credit reporting agencies do nothing in the way of protecting you against identity theft. Sure, they can offer a lot of services after the fact, and if you’re getting your credit report every single month you may be able to catch it faster than if you didn’t, but they do nothing in the way of protection.

The way I see it, it would be like hiring an armed guard to protect you in your house, but he does nothing except tell you about a robber after he’s already been through your house and taken everything. Not much help, is it?

Credit Card Protection Services

The next thing that is almost humorous to me is these credit card protection plans that you hear about every time you sign up for a new card. Besides other things, the main thing that they offer is to pay your credit card minimums for some amazing period of time in the event that I am unable to work. Guess who this plan is protecting?  It’s not protecting you, its protecting the credit card company! Look, if I am suddenly unable to work, there are a lot of things that are going to be more important for me to pay other than my credit card bills. Namely, my mortgage and my major utilities. You can count putting food on the table after that, and a few other things, and then you might be talking about my credit card bills. If I am going to be out of work for an extended period of time, my credit is probably going to take a hit no matter what. Why pay money to protect the credit card company?

Life Insurance for Children

This one is a no-brainer to me as well. To me, the basic premise behind life insurance is to provide for your loved ones after your death. This would imply that there are loved ones who rely on you financially. Well, besides some very rare circumstances, I don’t think that there are many children running around who have other loved ones that rely on them financially. The only thing that I could possibly see this being advantageous for is if you wanted to set aside some money for funeral expenses for a child. And I think there are other ways to do that.

So, yes, I think that having life insurance on a child makes no sense to me.

This is by no means a comprehensive list, and there are things popping up every single day in which people are trying to take your money form you. Before you sign up for anything, research and know your facts before moving forward. Most of the time, it seems that these are just new ways to get you to spend your money unnecessarily.

As always, your feedback and comments are greatly appreciated.


1 John Adams November 8, 2010 at 4:20 am

You do not write your own articles.

2 david/your finances101 November 8, 2010 at 5:05 am


I am not sure I understand your comment completely, but I can asssure you that all of the articles that have my name next to them are in fact written by me.

Thankks for commenting

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