paying council tax using creditcard

hpuse

All moneysavers,
Any idea whether your local council adds a transaction fee if you use a credit card to pay council tax?
Personally, I think there is no benefit setting up a direct debit for council tax, and I think I'm gonna stop it from this year seeing the coucil tax increase letter in the mailbox today saying it is going to be £2400pa. ,
Paying the same with a cash back credit card will at least see £24 returning to your pocket, nevermind the cheap service you receive and the masses of community that you support as a full tax payer for their free housing - sorry that was just thoughts popped out as keystrokes !

jillie1974

our council charge a fee. it should be on your bill on the reverse where it gives you the options of how to pay

skylight

My council adds a 2% fee for credit card payments. Debit card payments are free.

chappers

I think 1.5-2% is the standard so you will be down on the deal better stick to the old DD

beingjdc

Southwark do not appear to charge a fee.

Mikeyorks

hpuse wrote: »

All moneysavers,

.....it is going to be £2400pa. ..........Paying the same with a cash back credit card will at least see £24 returning to your pocket

Not sure where the 'moneysaving' fits in?

So you pay on a cashback card .... get your £24 .... and then have to pay off the £2400 to the CC company or incur interest.

Whereas if you pay by DD .... the £2400 can sit in a 6% account and you'll get (12 instalments) £72 gross interest on the average £1200 you have in the account. Even after basic rate tax you net £58 .... which is a factor of 2.5 times the benefit of the cashback ... and that's assuming the Council don't levy a fee on paying by CC .. most do.

If you have the £2400 to start with ... not a sensible deal.

LittleVoice

Mikeyorks

To do a proper comparison, on the basis that the £2400 is available to start with, then you would have to allow for the 6% interest being earned on the money before paying it over to the credit card company too. In fact there would be slightly more interest to be earned that way, wouldn't there, because of the possible delay (up to 56 days or whatever) in having to hand over real money?

Mikeyorks

You're quite right (but it's rarely 56 days if it's a cashback CC you use frequently) ..... but I simply traded that off against the fact that most Councils charge a fee of up to 2% so that (£48) immediately negated any interest in the interim (max £19 net).

Sorry .... being a bit lazy, at the time, as needed to make a 'phone call;)

LittleVoice

It seems to me that if you have a card which offers something like an introductory 3- or 6-month bonus cashback rate above the rate that the Council takes for processing (or any cash back if it doesn't charge), then it would be worth using the card for that amount of time.

Then switch to paying by SO or DD. (SO can be useful if very occasionally you want to defer payment by a few days.)

jamesd

Paying monthly by credit card works fine for me, with a council that doesn't charge a credit card fee. Cashback and leaving the monthly payment money in the savings account earning interest for an extra 35 days isn't a huge benefit but it's not nothing either.

Mikeyorks, you seem to be assuming that the credit card payers are doing it in a lump sum at the start. Maybe your council requires this but mine doesn't.