Consumers crave "financial relief when (they) need it most."

They don't need dreadful, good-for-nothing quasi-insurance programs to get that kind of protection.

And yet, countless consumers throw good money into bad "protection plans" like Account Protection Plus, a service of Direct Merchants Bank, in the hope of buying some peace of mind.

What they are getting instead is a Stupid Investment of the Week.

Click here to visit FOXBusiness.com's Identity Theft Center.

Click here to visit FOXBusiness.com's Investing page.

Stupid Investment of the Week highlights the problems and danger zones that make a security or investment product less-than-ideal for average consumers, in the hope that spotlighting trouble in one situation will make it easier for investors to avoid elsewhere.

From a regulatory standpoint, insurance is not an investment. Many credit-protection programs are set up so that they don't qualify as insurance, allowing issuers to skirt regulation and charge more for their services than an insurer would be allowed to by law. For Stupid Investment of the Week, however, any financial instrument on which the consumer lays out money expecting a return - protection, in this case — qualifies as an investment.

Credit-protection plans vary greatly from one program to the next, so there may be the rare case where a certain program is a good fit for some consumers.

That's not the case Account Protection Plus, which is marketed only to Direct Merchants Bank customers - the bank is a brand of HSBC Card Services - preying upon their fears.

Specifically, the plan offers up to a year of "involuntary unemployment protection," up to 25 months of disability protection, and 90 days of "approved, unpaid leave-of-absence protection."

Should any of those events happen, the protection plan effectively hits the "pause" button on your Direct Merchants card account, stopping the interest clock, relieving you of the responsibility to make monthly payments and avoiding late-payment or over-the-limit fees.

That comes at an "affordable" price of 89 cents per month for every $100 in your account balance (conveniently billed to your Direct Merchants card).

It sounds great — until you do the math and analyze the benefits.

That monthly fee adds up quickly. If you carry a $2,000 balance, the monthly fee is $17.80. Over a year, assuming the balance remains fairly static, that's more than $210.

In terms of charges, that has the same effect as increasing the annual percentage rate on the card by more than 10%. If you have a card with a rate of 11.5 percent, currently about the national average for a gold card, according to Bankrate.com, this would be like carrying a rate of about 23%.

Ouch.

"At that rate, what you are really doing is pre-paying the interest that you would have owed during that time when you are collecting benefits," says David Bohannon of Consultants Corner, an insurance advisory service in Louisville, Ky. "And, of course, there is a good chance you will never need the benefits, or that you won't find the benefits so valuable."

Credit-card issuers have been aggressively promoting these kinds of services for several years now, and one common consumer complaint about the policies is that they can be hard to trigger. You have to prove that unemployment is "involuntary," or that you have been disabled; while not speaking specifically about Account Protection Plus and Direct Merchants, it's clear that consumers have sometimes found the burden of proof excessively heavy, given the costs involved.

No credit

But even if you can get the benefits, the Account Protection Plus program most likely will disappoint you.

It doesn't pay your bills during the benefit period, nor does it even make minimum payments. And the way it stops interest accrual and late or over-the-limit fees is by "freezing" your credit account.

That's a great idea, provided you don't actually need credit during that time when you are unemployed, disabled or on a leave of absence. If those conditions might actually cause you to rely on credit, you're out of luck (and have a nice time trying to get a new credit card when you are unemployed and need some plastic to help carry you through).

And if you can afford to freeze the account, you could just as easily stop using the card and make the minimum payments on your own, avoiding any report to the credit bureaus.

Even that protection isn't all that it's cracked up to be; Account Protection Plus only shields your Direct Merchants account. Your other lenders will still report to the credit bureaus.

That's like putting on fresh underwear when your job is slogging waist-deep through manure; you may feel a little bit clean, but everyone else still thinks you're filthy.

"At the point where you are really scrambling and money is really tight, you would lose access to credit," says Gerri Detweiler, author of "The Ultimate Credit Handbook." "You'd be better off putting the money in a savings account and keeping it for emergencies, or putting the extra money toward paying off your balance, so that you have less to worry about if you lose your job or become disabled."

While several representatives of the Account Protection Plus program were willing to give me details, none was able to get management at the company to discuss the product with me. Ultimately, one referred me to an HSBC number, where the Account Protection Services office was "closed" at all hours of the day, despite supposedly having office hours of 9 a.m. to 9 p.m. on weekdays.

The best thing you can say for Account Protection Plus is that it does forgive your credit debt in the event of your death. Of course, you could buy a lot more life insurance for a lot less money.

Says Greg McBride, senior editor at Bankrate.com: "Credit card protection is not a substitute for adequate life insurance protection, and life insurance is a whole lot cheaper."

Actually, if it's structured like Account Protection Plus, a credit-protection plan is not a substitute for an emergency savings account, for paying down balances faster, or for any form of insurance. It's just a bad deal for the vast majority of consumers.

Click here to visit FOXBusiness.com's Identity Theft Center.

Click here to visit FOXBusiness.com's Investing page.

Copyright (c) 2006 MarketWatch, Inc.