Reliance on credit cards could increase council tax bill by 3.1%
Published by Max Salsbury for 24dash.com in Local Government and also in Communities, Finance
Credit card debt prudence 'too late for many'
By John Bowen
Credit comparison expert Totally Money recently released alarming data about peoples’ credit card habits and their reliance on using their plastic for household bills.
The survey by Totally Money found that 21 percent of consumers are already using their credit card to pay monthly bills. With the majority of card providers adding a surcharge of two percent to transactions, the overreliance on credit could leave already struggling households to fall deeper into debt.
This issue is compounded when we look at the recent council tax bill rise. The average council tax bill has risen 0.6 percent – costing the average consumer £8.78. With research suggesting that two million of us pay our council tax with a credit card and the given the majority of councils levy a surcharge of up to 2.5 percent, paying by credit card could increase this years’ council bill by an extra £36.60 – a total of 3.1 percent.
If the average council tax bill is £1,464, a 0.6 percent increase takes the bill to £1,472.78. If this is paid for by a credit card (at 2.5 percent surcharge), the total is £1,509.60 (assuming the credit card is paid in full at the end of each month).
The figures suggests our reliance on credit cards in this example is leading to a self-inflicted rise of 3.1 percent – much greater than the 0.6 percent council tax bill.
So what can be done about the situation?
For some it may be a lack of understanding of the additional costs of using credit cards – hopefully this article will go some way to helping this issue. However, for others, reliance on credit cards is not a misunderstanding but necessity.
For those, the best option would be a long term 0% purchase card to avoid interest payments or a market leading cashback card which could reduce ‘handling charges’ – the cashback card is only effective if paid off in full each month.
When a credit card is the only option, it is best to check the market for the card that is best suited to your situation and financial circumstances. Credit comparison expert TotallyMoney.com is able to check which card best suits you without leaving a dreaded ‘footprint’ on your credit score.
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