In the current economic environment, a new online payment service announced by last week by ChargeSmart LLC ("New Program Allows Consumers to Pay Mortgage with Credit Cards," July 10) could lead to an increase in receivables, and therefore, in risk for credit card issuers, according to an industry analyst.
ChargeSmart’s online payment service enables consumers to pay their mortgage, auto and student loans with their credit cards. The service works with Visa and MasterCard issuers and a network of more than 4,000 billers across the country.
Users of the service will pay a transaction fee of $4.95, plus 2.29 percent of the amount charged. Those fees go to ChargeSmart. If the borrower defaults on the credit card payment, that’s an issue between the cardholder and the card issuer, according to Mitch Friedman, one of the ChargeSmart founders.
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