Finance Industry Encourages Consumers to Pay Bills With Plastic

Sacramento Bee (CA) (08/18/08); Pugh, Tony
There are a number of new services available that allow consumers to use credit cards to pay mortgages, auto loans, student loans, utility bills and insurance premiums--including ChargeSmart, which imposes fees of $4.95 per transaction and 2.3 percent of the bill amount for its services. Supporters of such services say they give cash-strapped consumers time to come up with money for their monthly bills and enable spenders to take advantage of card-reward programs. However, there are concerns that such services could push borrowers further into debt and worsen the credit crisis. "Unless I'm missing something, the only type of consumer that would see any worth in this is someone who is totally strapped and desperate and willing to pay a really high fee to charge a mortgage payment or utility bills as some sort of last-gasp effort," says Consumer Action director Ken McEldowney.