I passed on making $3

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gwe67
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I passed on making $3

Post by gwe67 » Mon Dec 02, 2019 10:31 pm

I could have paid my property taxes using a credit card with 2.5% cash back. The government's credit card processor charges 2.4% for the transaction. I would have received about $83 in cash back within a day or two but would have to pay $80 to the credit card processor when the credit card bill was due. I also could have made a minimal amount of interest until the credit card bill would be paid in full. So I wrote a check. Was I wrong?
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AZAttorney11
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Re: I passed on making $3

Post by AZAttorney11 » Mon Dec 02, 2019 10:32 pm

Seriously?

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cheese_breath
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Re: I passed on making $3

Post by cheese_breath » Mon Dec 02, 2019 10:34 pm

Do you get free checking at your bank?
The surest way to know the future is when it becomes the past.

Tal-
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Re: I passed on making $3

Post by Tal- » Mon Dec 02, 2019 10:39 pm

Did you mail the check?
Debt is to personal finance as a knife is to cooking.

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Stinky
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Re: I passed on making $3

Post by Stinky » Mon Dec 02, 2019 10:40 pm

If the scale of financial mistakes runs from 1 to 10, this “mistake” is roughly a 0.

You missed out on $3 between credit card rebate and fee. Plus maybe $5 pretax in interest if you could invest money at 2% for a month.

I wouldn’t lose any sleep over it.
It's a GREAT day to be alive - Travis Tritt

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beyou
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Re: I passed on making $3

Post by beyou » Mon Dec 02, 2019 10:42 pm

I can't stand that our town charges a fee for electronic payment but free to mail in a check.
It has to save them $ to take electronic payments, how can they be so short sighted ?

jmorgans
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Re: I passed on making $3

Post by jmorgans » Mon Dec 02, 2019 10:44 pm

I too would pass on the $3 but look at other opportunities such as new card signup bonuses, spending threshold bonuses, upgrade bonuses, etc.

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gwe67
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Re: I passed on making $3

Post by gwe67 » Mon Dec 02, 2019 10:46 pm

Seriously? Yes.

Free checking? Yes.

Did I mail it? No. But I have plenty of free time.

I guess my opposition to this is that the processor charges a rate similar to payday loan companies and this service is probably used mainly by people that can't afford it.
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MrBobcat
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Re: I passed on making $3

Post by MrBobcat » Mon Dec 02, 2019 10:57 pm

beyou wrote:
Mon Dec 02, 2019 10:42 pm
I can't stand that our town charges a fee for electronic payment but free to mail in a check.
It has to save them $ to take electronic payments, how can they be so short sighted ?
Probably because of some state law prohibiting state and local governments from eating the CC processing fee. Pretty sure that's how it is in our state.

retire2022
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Re: I passed on making $3

Post by retire2022 » Mon Dec 02, 2019 11:00 pm

gwe67 wrote:
Mon Dec 02, 2019 10:46 pm
Seriously? Yes.

Free checking? Yes.

Did I mail it? No. But I have plenty of free time.

I guess my opposition to this is that the processor charges a rate similar to payday loan companies and this service is probably used mainly by people that can't afford it.
Ah, I need earnings on my credit cards stocks, thank you much appreciated :greedy

the way
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Re: I passed on making $3

Post by the way » Mon Dec 02, 2019 11:13 pm

beyou wrote:
Mon Dec 02, 2019 10:42 pm
I can't stand that our town charges a fee for electronic payment but free to mail in a check.
It has to save them $ to take electronic payments, how can they be so short sighted ?
gwe67 wrote:
Mon Dec 02, 2019 10:46 pm
I guess my opposition to this is that the processor charges a rate similar to payday loan companies and this service is probably used mainly by people that can't afford it.
You guys have this all wrong. They aren't pocketing the 2.4%, but only charge it to cover the CC payment network fees that they have to pay. $80+ times thousands of property owners would really add up to significant money. The only alternative would be to raise tax rates on everyone, which would be unfair to people not paying by CC.

btw, if your country accepts e-checks (direct bank account withdrawal), there is usually no fee.
Last edited by the way on Mon Dec 02, 2019 11:20 pm, edited 1 time in total.

Goal33
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Re: I passed on making $3

Post by Goal33 » Mon Dec 02, 2019 11:16 pm

Yes, you made a mistake. Once you bothered to calculate it and realize it’s to you benefit, you should have done it and stopped thinking about it.
A man with one watch always knows what time it is; a man with two watches is never sure.

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whodidntante
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Re: I passed on making $3

Post by whodidntante » Mon Dec 02, 2019 11:22 pm

You were not far wrong to pass on making $3. But you could have made $300 or more. That was the lost opportunity.

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sergeant
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Re: I passed on making $3

Post by sergeant » Tue Dec 03, 2019 2:09 pm

whodidntante wrote:
Mon Dec 02, 2019 11:22 pm
You were not far wrong to pass on making $3. But you could have made $300 or more. That was the lost opportunity.
Do tell!
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mystupidglasses
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Re: I passed on making $3

Post by mystupidglasses » Tue Dec 03, 2019 3:03 pm

sergeant wrote:
Tue Dec 03, 2019 2:09 pm
whodidntante wrote:
Mon Dec 02, 2019 11:22 pm
You were not far wrong to pass on making $3. But you could have made $300 or more. That was the lost opportunity.
Do tell!
Probably by opening a new credit card with a sign-up bonus.

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flossy21
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Re: I passed on making $3

Post by flossy21 » Tue Dec 03, 2019 3:09 pm

beyou wrote:
Mon Dec 02, 2019 10:42 pm
I can't stand that our town charges a fee for electronic payment but free to mail in a check.
It has to save them $ to take electronic payments, how can they be so short sighted ?
Our county recently mandated that they would begin charging a processing fee on credit card transactions for all Personal Property and Real Estate tax payments. This really bugged me because the address they list for sending in checks is some PO Box in Boston and I'm in Virginia. I emailed the local Treasurer to ask about the change and cost difference between sending the payments to Boston vs. allowing county residents to use a credit card. It turns out that the county's bank has a "lockbox" service that charges anywhere from $0.83 per check to $2.23 per check and the payments are processed immediately into the county's account. So this is a much cheaper solution than allowing residents to use a credit card without paying some transaction cost.

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JoeRetire
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Re: I passed on making $3

Post by JoeRetire » Tue Dec 03, 2019 3:14 pm

gwe67 wrote:
Mon Dec 02, 2019 10:31 pm
I could have paid my property taxes using a credit card with 2.5% cash back. The government's credit card processor charges 2.4% for the transaction. I would have received about $83 in cash back within a day or two but would have to pay $80 to the credit card processor when the credit card bill was due. I also could have made a minimal amount of interest until the credit card bill would be paid in full. So I wrote a check. Was I wrong?
How much do your checks cost? How about the ink you used to sign the check? Did you have to pay for a stamp in both cases, or only for the written check?

It was probably more like $3.50 once everything is accounted for. So there's that.
Don't be a lemming.

rbaldini
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Re: I passed on making $3

Post by rbaldini » Tue Dec 03, 2019 3:15 pm

You missed April Fool's Day by a few months.

Dottie57
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Re: I passed on making $3

Post by Dottie57 » Tue Dec 03, 2019 3:17 pm

I wish all my mistakes had cost me $3.

an_asker
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Re: I passed on making $3

Post by an_asker » Tue Dec 03, 2019 3:19 pm

retire2022 wrote:
Mon Dec 02, 2019 11:00 pm
gwe67 wrote:
Mon Dec 02, 2019 10:46 pm
Seriously? Yes.

Free checking? Yes.

Did I mail it? No. But I have plenty of free time.

I guess my opposition to this is that the processor charges a rate similar to payday loan companies and this service is probably used mainly by people that can't afford it.
Ah, I need earnings on my credit cards stocks, thank you much appreciated :greedy
Huh? OP did not pay the credit card company any moolah! Why are you thanking him/her? :oops:

an_asker
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Re: I passed on making $3

Post by an_asker » Tue Dec 03, 2019 3:21 pm

JoeRetire wrote:
Tue Dec 03, 2019 3:14 pm
gwe67 wrote:
Mon Dec 02, 2019 10:31 pm
I could have paid my property taxes using a credit card with 2.5% cash back. The government's credit card processor charges 2.4% for the transaction. I would have received about $83 in cash back within a day or two but would have to pay $80 to the credit card processor when the credit card bill was due. I also could have made a minimal amount of interest until the credit card bill would be paid in full. So I wrote a check. Was I wrong?
How much do your checks cost? How about the ink you used to sign the check? Did you have to pay for a stamp in both cases, or only for the written check?

It was probably more like $3.50 once everything is accounted for. So there's that.
OP wrote a check. Unless he/she went on a long hike, his/her trip to the office and/or stamp would definitely put him/her over $3.50 with or without the ink.

BTW, this thread has definitely resulted in $100+ of lost productivity :oops:

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JoeRetire
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Re: I passed on making $3

Post by JoeRetire » Tue Dec 03, 2019 3:23 pm

an_asker wrote:
Tue Dec 03, 2019 3:21 pm
BTW, this thread has definitely resulted in $100+ of lost productivity :oops:
Maybe for you, but I haven't lost any productivity at all.
You can't lose what you don't have!

:P
Don't be a lemming.

an_asker
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Re: I passed on making $3

Post by an_asker » Tue Dec 03, 2019 3:34 pm

JoeRetire wrote:
Tue Dec 03, 2019 3:23 pm
an_asker wrote:
Tue Dec 03, 2019 3:21 pm
BTW, this thread has definitely resulted in $100+ of lost productivity :oops:
Maybe for you, but I haven't lost any productivity at all.
You can't lose what you don't have!

:P
I don't make anywhere close to $100 in the time I spent reading and replying. I meant all Bogleheads collectively LOL!

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JoeRetire
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Re: I passed on making $3

Post by JoeRetire » Tue Dec 03, 2019 3:48 pm

an_asker wrote:
Tue Dec 03, 2019 3:34 pm
JoeRetire wrote:
Tue Dec 03, 2019 3:23 pm
an_asker wrote:
Tue Dec 03, 2019 3:21 pm
BTW, this thread has definitely resulted in $100+ of lost productivity :oops:
Maybe for you, but I haven't lost any productivity at all.
You can't lose what you don't have!

:P
I don't make anywhere close to $100 in the time I spent reading and replying. I meant all Bogleheads collectively LOL!
Fair enough. I apologize for not contributing anything to the total productivity loss.
Don't be a lemming.

Trader Joe
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Re: I passed on making $3

Post by Trader Joe » Tue Dec 03, 2019 3:50 pm

gwe67 wrote:
Mon Dec 02, 2019 10:31 pm
I could have paid my property taxes using a credit card with 2.5% cash back. The government's credit card processor charges 2.4% for the transaction. I would have received about $83 in cash back within a day or two but would have to pay $80 to the credit card processor when the credit card bill was due. I also could have made a minimal amount of interest until the credit card bill would be paid in full. So I wrote a check. Was I wrong?
No you were not wrong. Small potatoes...

surfstar
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Re: I passed on making $3

Post by surfstar » Tue Dec 03, 2019 3:55 pm

gwe67 wrote:
Mon Dec 02, 2019 10:46 pm
Seriously? Yes.

Free checking? Yes.

Did I mail it? No. But I have plenty of free time.

I guess my opposition to this is that the processor charges a rate similar to payday loan companies and this service is probably used mainly by people that can't afford it.
Uh oh. How much gas did you spend on driving there? If you walked, then you got free exercise :)

mcraepat9
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Re: I passed on making $3

Post by mcraepat9 » Tue Dec 03, 2019 3:59 pm

Your time is more valuable than thinking about this. Move on.
Amateur investors are not cool-headed logicians.

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cheese_breath
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Re: I passed on making $3

Post by cheese_breath » Tue Dec 03, 2019 4:04 pm

surfstar wrote:
Tue Dec 03, 2019 3:55 pm
gwe67 wrote:
Mon Dec 02, 2019 10:46 pm
Seriously? Yes.

Free checking? Yes.

Did I mail it? No. But I have plenty of free time.

I guess my opposition to this is that the processor charges a rate similar to payday loan companies and this service is probably used mainly by people that can't afford it.
Uh oh. How much gas did you spend on driving there? If you walked, then you got free exercise :)
But he'll need to replace his shoes sooner.
The surest way to know the future is when it becomes the past.

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beyou
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Re: I passed on making $3

Post by beyou » Tue Dec 03, 2019 4:09 pm

the way wrote:
Mon Dec 02, 2019 11:13 pm
beyou wrote:
Mon Dec 02, 2019 10:42 pm
I can't stand that our town charges a fee for electronic payment but free to mail in a check.
It has to save them $ to take electronic payments, how can they be so short sighted ?
gwe67 wrote:
Mon Dec 02, 2019 10:46 pm
I guess my opposition to this is that the processor charges a rate similar to payday loan companies and this service is probably used mainly by people that can't afford it.
You guys have this all wrong. They aren't pocketing the 2.4%, but only charge it to cover the CC payment network fees that they have to pay. $80+ times thousands of property owners would really add up to significant money. The only alternative would be to raise tax rates on everyone, which would be unfair to people not paying by CC.

btw, if your country accepts e-checks (direct bank account withdrawal), there is usually no fee.

My tax collector charges for e-checks too.

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beyou
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Re: I passed on making $3

Post by beyou » Tue Dec 03, 2019 4:12 pm

flossy21 wrote:
Tue Dec 03, 2019 3:09 pm
beyou wrote:
Mon Dec 02, 2019 10:42 pm
I can't stand that our town charges a fee for electronic payment but free to mail in a check.
It has to save them $ to take electronic payments, how can they be so short sighted ?
Our county recently mandated that they would begin charging a processing fee on credit card transactions for all Personal Property and Real Estate tax payments. This really bugged me because the address they list for sending in checks is some PO Box in Boston and I'm in Virginia. I emailed the local Treasurer to ask about the change and cost difference between sending the payments to Boston vs. allowing county residents to use a credit card. It turns out that the county's bank has a "lockbox" service that charges anywhere from $0.83 per check to $2.23 per check and the payments are processed immediately into the county's account. So this is a much cheaper solution than allowing residents to use a credit card without paying some transaction cost.

And likely the govt pays a bank to accept e-checks (ach) too. There are collector costs to all 3 methods of payment, but only 2 of the 3 are passed on to taxpayers. So they are encouraging us to use the least efficient method of payment.

Broken Man 1999
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Re: I passed on making $3

Post by Broken Man 1999 » Tue Dec 03, 2019 4:14 pm

Yesterday I received my property tax bill for the third installment, due 12/31/2019.

December is a heavy expense month, with Christmas gifts, our annual Christmas party, DW's life insurance, etc., the list goes on....

So, I will do some expense smoothing by charging my property tax bill after my credit card closes for this month. I will pay 2.35%, but receive 2% back as a rebate. Net cost for charging: $1.45.

My property tax bill is the only bill that collects a fee for use of CC.

When all is said and done, for my very high/lumpy December spending, I will be able to pay everything off, with no interest, over three months, using my timing of the charges of the various bills, and stretching my grace period to the max. And, I will also have pushed some spending (our spending requires a distribution from our TIRAs which means 22%-24% taxes) into the 2020 tax year.

Honestly, this is a game for me. And it isn't a high stakes game, at all. Keeps my brain working, though.

Broken Man 1999
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FrugalConservative
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Re: I passed on making $3

Post by FrugalConservative » Tue Dec 03, 2019 4:14 pm

Stinky wrote:
Mon Dec 02, 2019 10:40 pm
If the scale of financial mistakes runs from 1 to 10, this “mistake” is roughly a 0.

You missed out on $3 between credit card rebate and fee. Plus maybe $5 pretax in interest if you could invest money at 2% for a month.

I wouldn’t lose any sleep over it.
I would rate it a -5 :D

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Kenkat
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Re: I passed on making $3

Post by Kenkat » Tue Dec 03, 2019 4:25 pm

So, gwe67, why didn’t you take advantage of this $3 arbitrage opportunity? What was your reason?

Karma? So that on your deathbed, you would achieve total consciousness?
Lazy? Did not want to get the card out, type those 16 numbers, expiration date and security code in?
Altruism? Didn’t want to leave someone else $3 short just for your benefit? Trying to be a good, non-greedy person?
Something else?

The answer to this question will provide the answer to your original question of “was I wrong”.

MarkerFM
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Re: I passed on making $3

Post by MarkerFM » Tue Dec 03, 2019 4:42 pm

One of our places bills annually and charges 2.5% for credit card payments, and nothing for ACH payments. But, they give a sliding discount that starts at 4%, going down 1% a month for four months. You can bet we take advantage of this. It works out to $800 at the full discount.

The other place bills quarterly and charges based on a schedule that works out to between 2.5% and 3.0%. They charge $.25 for an ACH payment, which irks me. So, I set up payments through Fidelity billpay to be mailed just before the due date. This of course is free to me. They always take at least a week to cash the check. Net savings here from float and avoided fees, about $5 per year lol. It's not the size of the savings but the idea that I'm sticking it to the man.

the way
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Re: I passed on making $3

Post by the way » Tue Dec 03, 2019 6:33 pm

beyou wrote:
Tue Dec 03, 2019 4:09 pm
My tax collector charges for e-checks too.
If there are charges for e-checks, they are usually flat rate (of $1 or $2) which is on a completely different plane than a 2.4% fee ($80 in OP's case).

If you are unwilling to shell out the extra buck and are serious about saving your county money, then you should check out using Bill Pay from your bank or CU account to pay. That is usually processed electronically (for a large payee like the county) so everyone wins: no fees, no stamps, and no manual handling of checks.

btw, if you truly feel that network fees are a rip off, then you should stop using credit cards everywhere else too. If you aren't paying the interchange fees, then the merchant is. If using cash everywhere is a bridge too far, then you could at least switch to debit cards (PIN transaction) which has much lower fees for the merchant. Watch out though, you would lose some of the consumer protections provided by your CC.

TropikThunder
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Re: I passed on making $3

Post by TropikThunder » Tue Dec 03, 2019 10:46 pm

Finally a reason to keep paying taxes through escrow. No pesky credit card fees to worry about. :P

anon_investor
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Re: I passed on making $3

Post by anon_investor » Tue Dec 03, 2019 10:55 pm

$3 lesson learned, charge it next time for the cash back!

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whodidntante
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Re: I passed on making $3

Post by whodidntante » Tue Dec 03, 2019 11:18 pm

TropikThunder wrote:
Tue Dec 03, 2019 10:46 pm
Finally a reason to keep paying taxes through escrow. No pesky credit card fees to worry about. :P
Unless you pay your mortgage with a credit card. When it's profitable, I do. :happy

Pu239
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Re: I passed on making $3

Post by Pu239 » Tue Dec 03, 2019 11:39 pm

Our city doesn't charge a cc fee for property tax payments so that's what I do, making about $110. I too would pass for a few $ but it's a perfect expense for a new cc rewards bonus.

DVMResident
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Re: I passed on making $3

Post by DVMResident » Wed Dec 04, 2019 12:03 pm

You could have saved $3 plus the cost of the stamp, man!!

In seriousness, I do like to pay with CC (or direct transfer) to ensure the payment went through and the check was not lost in the mail (regardless if I or the CC makes a few bucks either way).

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White Coat Investor
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Re: I passed on making $3

Post by White Coat Investor » Wed Dec 04, 2019 12:05 pm

gwe67 wrote:
Mon Dec 02, 2019 10:31 pm
I could have paid my property taxes using a credit card with 2.5% cash back. The government's credit card processor charges 2.4% for the transaction. I would have received about $83 in cash back within a day or two but would have to pay $80 to the credit card processor when the credit card bill was due. I also could have made a minimal amount of interest until the credit card bill would be paid in full. So I wrote a check. Was I wrong?
I've done this with income taxes before that cost 1.87% to use and the card paid me 2%. But I mainly did it for the convenience/float, not the arbitrage. But for $3?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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greg24
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Re: I passed on making $3

Post by greg24 » Wed Dec 04, 2019 12:14 pm

I would not pay $80 for a probable (not guaranteed) return of $3.

flyingaway
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Re: I passed on making $3

Post by flyingaway » Wed Dec 04, 2019 12:25 pm

I went to their designated bank to pay the property tax with a check and saved an additional $0.55 of postage.

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