ChargeSmart Is New Kid On Credit Card Bill Pay Block
Are you upside down in a loan you can’t afford? If it’s an auto, education, or mortgage loan (or even a utility bill!) you struggle to pay each month, there’s hope. Though not ideal, at least it’s good to know that options exist. ChargeSmart is the latest company to offer consumers the option to pay such bills with a credit card.
In the past, mortgage loans have been particularly difficult (impossible) to pay with credit cards, but ChargeSmart makes it possible through a third-party arrangement. The banks are not affiliated with, nor do they endorse, ChargeSmart, and it may be for good reason. The habit of putting living expenses on the credit card — even if it’s to reap credit card rewards — is a highly treacherous path.
High-balance credit cards can mean high interest rates, higher payments, higher cost of living and higher risk of default. There will inevitably be those ChargeSmart customers who are not doing this to reap rewards, but because they have to. They cannot afford to pay their electric bill, mortgage payment, car loan, etc. Where will those consumers find money to pay off their credit card bills each month? A HELOC? It gives new meaning to a revolving line of credit.
ChargeSmart is particularly dangerous because it adds fees onto each transaction, a flat rate plus a percentage of the payment processed. As MSNBC pointed out, CardIt — ChargeSmart’s like-minded predecessor discussed on this blog previously — is now out of business. We’ll see how long ChargeSmart will float. For consumers trying to stay afloat, it’s probably best not to hitch onto ChargeSmart’s raft. Pick up a second job, sell stuff, eat out less, take public transportation, rent out part of your house — do whatever you must to increase income and decrease cost of living. And that’s truly smart.
