Read fine print on ‘If you lose your job’ offers

updated 6:11 p.m. ET Oct. 21, 2009

NEW YORK - You can finally indulge in that vacation to Paris. And if you lose your job and suddenly need the money back, the airline will give you a refund.

It's a foolproof plan. Except that such deals usually come with strings attached.

As the unemployment rate marches toward 10 percent, retailers big and small have emerged with programs that let you walk away from purchases at no cost if you lose your job. The idea is to ease doubts about spending for those who feel uncertain about their finances.

The promotions, known as "job loss protection plans," no doubt provide a valuable safety net for those who would buy anyway. But if you're on the fence because money is tight, it's worth taking a closer look at the fine print.

Each promotion differs, but here's a rundown of six plans and what to watch for. All require you to submit an application and in most cases proof that you were laid off.

Citigroup mortgages
Expires: No date set.

How it works: Citigroup will lower mortgage payments for unemployed homeowners to an average of $500 a month for three months or longer, depending on your circumstances. The loan is considered in good standing, and is not reported as delinquent.

The fine print: If your spouse is also listed on the mortgage, you both need to be unemployed and at least one of you needs to have been laid off in the past year. If one of you works, the annual income can't be more than $10,000.

Your mortgage also needs to be 60 days or more past due or in foreclosure, but that term may soon be loosened.

"We're looking at expanding this to include those who are current on payments," said Sanjiv Das, CEO of CitiMortgage. He said the change will likely happen before the end of the year.

Another concern — your new lowered payment must at least cover escrow, which is generally property taxes and insurance. So if your escrow is $500, the payment would be at least that amount.

One reason the program sounds so restrictive is that it's more of a safety net for those who don't qualify for the federal loan modification program, which requires an income.

"This was meant to catch those that fall through the cracks," Das said.

The lesson: Unemployment alone may not be automatic qualifier; there could be numerous factors you need to meet to be eligible.

Discover CDs
Expires: Dec. 31

How it works: Those who open or renew 12-month CDs won't be charged penalties if they lose their job within one year and need to make an early withdrawal. The remainder of the balance continues accruing interest. Enrollment is automatic for CDs opened or renewed after July 1.

Penalty rates on early withdrawals vary, but at Discover be prepared to pay six months of interest on the amount withdrawn from a 12-month CD. So if you invested $20,000 at the current 2 percent rate and withdraw $10,000, the penalty fee would be $100.

The fine print: There aren't many catches. But you must be employed full time when you open or renew the CD, and for 30 days thereafter. You also need a minimum balance of $2,500 in the CD.

The lesson: Job loss promotions are intended for people who have been working steadily for some time. In this case, it's at least 30 days. But other plans might have longer requirements.

Hyundai cars
Expires: Dec. 31

How it works: You can return your car for up to one year after the purchase. If the value of the loan exceeds the value of the car, you're not responsible for up to a $7,5000 difference.

So if you bought a $20,000 car and made two payments of $500, you would still owe $19,000. If the car is only worth $17,000 when you return it, you don't need to pay that $2,000 difference.

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