The threat of identity theft is very real – just ask the 11.6 million Americans whose identities were stolen last year.
With such crime on the rise, identity theft policies have sprung up all over the place, typically ranging between $120 and $300 per year, according to CreditKarma.com, which also points out one big caveat: "Most policies have limits of $10,000 to $15,000, and come with a deductible as high as $500."
Here's why you're better off without it
The CARD Act: Thanks to this little regulation, you're only on the hook for $50 worth of fraudulent charges made on your credit card if someone steals it.
Zero Liability: What's more, many credit issuers offer zero percent liability for customers, which means they'll cover any fraudulent transactions.
There are cheaper options: As CreditKarma points out, you might be covered for ID theft under your homeowner's insurance policy. Credit issuers also might offer additional protections at a fraction of the cost of going with an independent plan.
You can protect yourself: Unless you're bankrolling millions and need a team of accountants at your beck and call, you can do the dirty work yourself. Ask your bank and credit lender to set you up for instant fraud alerts. The minute any suspicious activity pops up, they'll ping you via SMS text, email or by phone and you can cancel the card in minutes.
The one exception: Debit card users don't enjoy the same cushy protections as credit card holders. The Federal Electronic Fund Transfer Act covers you much like the CARD Act – making your liable for just $50 of fraud – but that's only if you notify your bank within two days. From that point on, your liability rises to $500 and becomes unlimited after just 60 days.DON'T MISS: The most heartbreaking scams we've ever seen >
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