Credit Report 2GO!

A consumer group has criticised a number of councils and local authorities for imposing surcharges for people who wish to pay tax bills or other costs by credit card.

‘Which?’ magazine, using Freedom of Information legislation, found that 55 councils in the UK are imposing additional fees for those who chose to pay by credit card, with 12 adding 2% or more to the cost of services.

Two councils were also found to be charging for debit card transactions, which attract a much lower fee for the retailer than a credit card transaction.

Bath and North East Somerset Council were named amongst the worst culprits, imposing a surcharge of 3% on council tax payments, planning applications and many other services, if a credit card is used.

Credit card companies impose a fee on retailers, known as merchants, for handling a credit card transaction and it is that fee that councils claim is the reason behind these charges. The

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Credit cards have replaced cash. I know that we all agree with it. How many of us walk around with nothing in our wallets but our identification cards, the numerous credit cards we own, and little else ? Plastic cash, the nick name given to credit cards surely explains the important position given to the credit cards in our life. But this culture of credit cards has meant that we have been one of the causes for the world to come to where it is today one with economies tumbling and a global recession. Although we use credit cards for all our cash requirements, we seriously lack the discipline of unsecured debt management.

If the credit card debt counseling is what will take us out of this mess, how can we effectively use it for our own good?? First of all, we need to make sure we do not spend more than we can afford.

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Your income may become a more important factor in determining whether you’ll be approved for a credit card, according to a post in the WSJ.

The paper said beginning in February, credit card companies will be required (Credit Card Bill of Rights) to consider an applicant’s income or assets/current debt before extending credit to ensure consumers have the ability to repay.

In preparing for the change, the credit bureaus have already gotten in on the income estimation business, with Experian reportedly nailing down income to the nearest thousand.

They came up with their estimates by matching credit reports with wages, interest, and investment income, along with total credit lines and related payments.

These income estimates will help credit card issuers approve or decline applicants, and may also be utilized to increase or decrease an existing credit line.

In the past, credit card issuers simply asked consumers to enter their gross annual income in a box on the application form, but soon you could be required to provide pay stubs, tax returns, or be asked to fill out a form 4506, which allows the IRS to release your tax filings to lenders (so no fudging the numbers).

What the changes really communicate is that credit scoring has proven to be unreliable, at least as a standalone determinant of capacity to repay debts.

Of course, the income estimates are just ballpark figures when it comes down it, which is why the credit bureaus’ contracts prohibit card issuers from turning down customers based solely on the information.

See: why credit card regulations are worthless.