B of A Changing Its Credit Card Insurance Option
Bank of America is dropping its little-used travel accident insurance for holders of its standard credit card. It is the latest of several card issuers to do so.
In its place, Bank of America is offering standard card holders an accidental death and dismemberment policy--the same policy it offered to former Security Pacific checking customers a few months ago. Consumer advocates say it is not very useful either.
The bank said it will drop the travel accident insurance for standard MasterCard and Visa card holders effective Monday. Gold card holders will continue to receive the insurance, which covers certain costs resulting from travel accidents, up to $150,000. The gold versions of MasterCard and Visa compete with the American Express card, which offers travel accident insurance. Citibank and Chase Manhattan Bank have already made similar moves.
Credit card industry analyst Robert B. McKinley, based in Frederick, Md., said that as banks lower the interest rates charged on credit card balances, they are coming under pressure to reduce costs. Insurance enhancements are the first to go, he said, since consumers “do not perceive them as creating value.”
So why is Bank of America offering a new insurance? One possible reason is that the death and dismemberment policy is a potential moneymaker for the bank. The offer provides card holders with free coverage up to $1,000 and the option of purchasing coverage up to $150,000. If a card holder takes additional coverage, Bank of America collects a fee from the Connecticut-based company that markets the policy.
Should you take additional coverage? While the free coverage is a no-lose deal, Consumers Union, the nonprofit publisher of Consumer Reports, advises against buying the accidental death and dismemberment insurance because it doesn’t cover every cause of death.
*
Some Deal: Subscribers to Weekly Variety this month are receiving questionnaires asking about their businesses and their job titles. People who return completed surveys get a chance to renew their subscriptions to the Hollywood trade publication “at the lowest possible price currently available--$149 a year.”
What the survey mailing fails to mention is that this low price isn’t so special. A customer service representative at Weekly Variety told us that $149 is the regular subscription price, available to anyone who fills out a subscription card.
*
Plastic or Paper: Mennen’s new Lady Speed Stick dispensers are nearly 13% taller than the old ones, though they still contain 1.5 ounces of deodorant. The change results from a decision to stop packaging the dispensers in paper boxes, the company said.
Michelle Ray, senior product manager, said the larger dispensers stand out better on grocery store shelves and allow space for promotional messages that used to be on the boxes.
Environmentalists say the changes represent a trade-off: less paper for more plastic. “Getting rid of secondary packaging is a good step, but not making the dispenser bigger would be even better,” said Barbara Olansky, a lawyer with the Environmental Defense Fund in New York.
*
Odds and Ends: The ghost of recession, past and present, is keeping a lid on Halloween spending. Hallmark Cards predicted that Americans will spend $400 million on Halloween candy, costumes, decorations and other paraphernalia--about the same as last year. . . . Don’t be surprised if Barney, the purple dinosaur star of the PBS show of the same name, shows up in your neighborhood this weekend. Manufacturers and retailers report that Barney is the year’s best-selling costume. Target expects to sell about 80,000 Barney costumes by the time the weekend is over, nearly triple the number of the second-most-popular costume, Aladdin.
