Major CC purchase, does it make sense to pay the 3%

Discussion in 'General Discussion | Credit Cards' started by Jellypods, Oct 1, 2012.  |  Print Topic

  1. Jellypods

    Jellypods Silver Member

    Messages:
    20
    Likes Received:
    11
    Status Points:
    125
    Instead of cash, give the vendor the CC and pay him the CC fee to get the miles? 10k Euro, 1 mile per Euro. Fee is 3%.
     
    marcwint55, Gargoyle and Jett Rink like this.
  2. Million Mile Secrets

    Million Mile Secrets Silver Member

    Messages:
    233
    Likes Received:
    413
    Status Points:
    460
    I personally wouldn't pay 3% (or 3 cents per mile) unless it was an easy way to complete a minimum spending on a card to get the sign-up bonus.
     
  3. Jett Rink
    Original Member

    Jett Rink Silver Member

    Messages:
    1,223
    Likes Received:
    1,405
    Status Points:
    910
    If the miles gained will top off your account for premium award travel, if available (or projected to be available), then yes.
     
    marcwint55 and Gargoyle like this.
  4. npupik

    npupik Active Member

    Messages:
    11
    Likes Received:
    14
    Status Points:
    95
    is the vendor charging the fee, or is the 3% because of the foreign transaction fee on the CC you're going to use? wondering whether you could put on a card without a foreign trans fee...
     
  5. guberif

    guberif Silver Member

    Messages:
    686
    Likes Received:
    1,060
    Status Points:
    825
    My guess is they don't want to pay a vendor transaction fee on a 10K purchase, so the only way they'll run the transaction is to charge you for the fee.

    My dad used to have a VW car dealership and had someone come in once that wanted to buy a brand-new Beetle for sticker price on their credit card. He was willing to eat the 3% fee on a full-price sale.
     
  6. CescoAiel

    CescoAiel Silver Member

    Messages:
    175
    Likes Received:
    206
    Status Points:
    375
    Honestly, if a vendor choses to accept CC, they should 'eat' the fee, and not charge the fee forward to their customers... It's a business decision to accept CCs, and if you do, you get the advantage of the fact that people will be more likely to buy (people just tend to buy quicker if they can charge to a CC), and thus more revenue...

    Make the calculation whether the increased revenue offsets the CC fees... And then decide whether or not to accept CC, but whichever it is, don't charge the fee forward to your customers...

    *Steps off of soapbox*
     
    viguera likes this.
  7. viguera
    Original Member

    viguera Gold Member

    Messages:
    4,737
    Likes Received:
    6,913
    Status Points:
    4,745
    I thought it was explicitly forbidden for merchants to pass the processing fee to customers that pay with a credit card. I'm sure there's verbiage about this on whatever merchant agreement they need to sign before being allowed to process payments this way.
     
  8. CescoAiel

    CescoAiel Silver Member

    Messages:
    175
    Likes Received:
    206
    Status Points:
    375
    For some countries and CC companies, yes... Not for others... Varies on what local law permits, and how the local CC offices view matters...
     
  9. marcwint55

    marcwint55 Gold Member

    Messages:
    2,517
    Likes Received:
    4,573
    Status Points:
    2,570
    you can probably buy the miles for less than 3%. I wouldn't pay more than 1.5%.
     
  10. guberif

    guberif Silver Member

    Messages:
    686
    Likes Received:
    1,060
    Status Points:
    825
    It is prohibited in the merchant agreement, but good luck enforcing it. Ever been to a coffee shop/gas station/corner store that had a handmade "debit/credit minimum purchase $5" sign?
     
  11. NYBanker
    Original Member

    NYBanker Gold Member

    Messages:
    32,725
    Likes Received:
    191,901
    Status Points:
    20,020
    Yes. I've called American Express on a few of them. The signs come down within a few days of calling. Sending a cellphone picture of the sign helps. :)

    Visa/Mastercard not so easy...the card-issuing banks punt to Visa or MC head office...and I've not spent the time to try and navigate their organizations.

    I don't mean to be a pain to these small businesses...but accepting the card for all transactions is part of the deal of accepting the Amex card. Don't like it, don't take Amex. Simple as that.
     
    guberif likes this.
  12. viguera
    Original Member

    viguera Gold Member

    Messages:
    4,737
    Likes Received:
    6,913
    Status Points:
    4,745
    Yeah that's what I'm thinking... the agreements specifically state no minimum and no maximum (well, your credit limit is another thing :) ).

    I think some merchants are obviously peeved at this (and no doubt Dodd-Frank will make a mess of things for consumers in the long run) but I find that a lot of them don't know what they're allowed or not allowed to do -- or perhaps do and just look the other way. And I blame consumers just the same... most people don't know about cash discounts and think that paying more for gas on credit happens because the fees are being passed on to them.
     

Share This Page