ATO credit card trial criticised

Keeping on top of multiple financial commitments is proving to be an increasingly difficult task for many people, it has been suggested.As the economic crisis continues to rumble on, financial counsellor Jill Com reveals in an article in the Age that her

A trial scheme set up by the Australian Tax Office (ATO) which allows people to pay their tax bills via credit card has come under criticism from a number of groups, it has emerged.

One of these is the Consumer Credit Legal Centre, where principal solicitor Katherine Lane claimed that such a scheme is "reckless" for tempting people to place more debt on their credit cards.

The scheme, which implements a charge of up to 1.05 per cent, can be used by Visa, MasterCard and American Express customers and is set to be evaluated in August.

"Clearly it is not ideal to put tax bills on to your credit card, especially if you are financially stretched," Christopher Zinn, of consumer group Choice, adds.

However, the ATO claims that the feedback it had received so far on the scheme had been "very positive", with over 12,000 card payments being made.

For those looking to use a credit card to fund expenditure selecting one which offers an interest free period on purchases could be recommended.

Doing so may be especially advisable as recent figures from the Reserve Bank revealed that credit card purchases rose 2.5 per cent over the course of May to stand at $16.89 billion.

Written by Nate Sawyer.