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Valued Member
Posts: 29
Registered: ‎04-02-2007
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Businesses That DO NOT Accept Cards

I have often wondered why certain types of businesses, like mortgage companies, life insurance providers, car loans, some utilities,  etc., DO NOT accept cards for payment.

 

Is it because of the costs to them, or is it because Visa/MC/Amex will not allow them to ???

 

Anyone have any first hand knowledge or experience about this ???

Established Contributor
Posts: 554
Registered: ‎09-28-2012
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Re: Businesses That DO NOT Accept Cards


John1956 wrote:

I have often wondered why certain types of businesses, like mortgage companies, life insurance providers, car loans, some utilities,  etc., DO NOT accept cards for payment.

 

Is it because of the costs to them, or is it because Visa/MC/Amex will not allow them to ???

 

Anyone have any first hand knowledge or experience about this ???


I would assume it becaise if you are paying with credit , and not actual capitol (cash). Plus let alone the abuse of rewards programs.



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Registered: ‎11-28-2012
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Re: Businesses That DO NOT Accept Cards

Personal experience (via my job), charges are EXTREMELY easy to dispute after the fact. Costs of recoup outweigh the convenience of swiping a card for payment (for the vendor)

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Registered: ‎09-25-2011
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Re: Businesses That DO NOT Accept Cards

2-3.5% transaction costs mainly. Also remember banks want their money, and if your using credit to pay your rent/mortgage it can get you further and further into debt lowering the chances that they will get paid on time in months to come. Why? because your using credit and not cash means you could be placing yourself further and further into debt.

 

 

But there are ways to do it for cheap. Where you pay around 1% up or down of the transaction cost out of your pocket to pay your mortgage with your credit card. So if you paid $3,000 you lost $30, but you would also get 3,000 to 6,000 points.  Now if those points are worth it to you depends on the programs you used.

 

For instance United Mileage Club card I value these points at minimum of 2.5 cents per point. but since you get 1.5 points per dollar spent that's 3.75 cents per value. So even if I pay extra 1 cent it makes sense for me to spend the $30 up front to get what I value is $112.50 for travel. If I fly first class those points can be worth as much as 9 cents on the dollar, so that could be $270 towards first class travel.

 

Even at Capital One Venture card would make sense at 2% but by a smaller margin.


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Senior Contributor
Posts: 3,070
Registered: ‎11-02-2009
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Re: Businesses That DO NOT Accept Cards

I've always assumed it was the swipe fees coupled with the differences in the dynamics of the transaction.  McDonalds has no problem accepting credit cards and eating that fee because you don't need a cheeseburger.  You might not frequent the restaurant if you can't use your CC.  Your mortgage company can take your house away if you don't pay.  They don't have to accept your credit card. 

 

l'm being a little facetious there because I understand there are other loan products that are not secured and that still don't take credit cards.  Still, it's not a discretionary purchase.  They know that you're generally going to pay even if they don't give you options about method of payment. 


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Registered: ‎07-01-2012
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Re: Businesses That DO NOT Accept Cards

+1 above.

Because they don't have to.
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Valued Contributor
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Registered: ‎10-02-2012
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Re: Businesses That DO NOT Accept Cards

I just look at it this way. You can't pay a loan with a loan.

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Re: Businesses That DO NOT Accept Cards

CC policies can also be abused. Just recently a Small business (I'm familiar with) got hosed out of $9K. The person spent three months at a program and complained to Amex that they didn't get proper service. Business owner had to take money from savings to cover operating expenses so checks didn't bounce.


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Re: Businesses That DO NOT Accept Cards


Dustink wrote:

I just look at it this way. You can't pay a loan with a loan.


That's not it at all.  Not unless the entire refinance industry just went south.  Smiley Surprised


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Current Score: EQ 681 (04/05/13); TU 98 728 (01/06/12), TU 08? 760 (provided by Barclay 1/2/14), TU 04 728 (lender pull 01/12/12); EX 742 (lender pull 01/12/12)
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Re: Businesses That DO NOT Accept Cards


Walt_K wrote:

Dustink wrote:

I just look at it this way. You can't pay a loan with a loan.


That's not it at all.  Not unless the entire refinance industry just went south.  Smiley Surprised


On a regular basis, it will end at some point. The mortgage company doesn't want to take on the risk. Also, they don't want to pay a fee. Same with life insurance. Although, I don't get why auto insurance accepts CC but not life insurance.

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