topic Re: Daycare expenses via AMEX Gold for MR Points! in Personal Finance

Daycare expenses via AMEX Gold for MR Points!

Anonymous — Wed, 18 Sep 2019 19:04:09 GMT

Hi all,

Would the above be advisable?

Monthly daycare expenses for my 2 children will come out to about $1500 starting in October. The problem is, the daycare will charge a 4% surcharge for credit card processing. Would it be worth paying the $60/month processing for these yummy 1500 MR points?

These guys make it seem like its a good idea, but I don't own those cards: https://thepointsguy.com/guides/best-credit-cards-for-daycare-expenses/

P.S. Daycare expenses are using pre-tax dollars the first $5k via Dependent Care FSA, per year.

Thanks!

Re: Daycare expenses via AMEX Gold for MR Points!

dragontears — Wed, 18 Sep 2019 19:12:48 GMT

What do you value MR points at? At 2cpp 1,500 MR = $30

Re: Daycare expenses via AMEX Gold for MR Points!

SouthJamaica — Thu, 19 Sep 2019 15:02:37 GMT

@Anonymous wrote:
Hi all,

Would the above be advisable?

Monthly daycare expenses for my 2 children will come out to about $1500 starting in October. The problem is, the daycare will charge a 4% surcharge for credit card processing. Would it be worth paying the $60/month processing for these yummy 1500 MR points?

These guys make it seem like its a good idea, but I don't own those cards: https://thepointsguy.com/guides/best-credit-cards-for-daycare-expenses/

P.S. Daycare expenses are using pre-tax dollars the first $5k via Dependent Care FSA, per year.

Thanks!

No. No way that any rewards will outweigh a 4% surcharge.

Re: Daycare expenses via AMEX Gold for MR Points!

randomguy1 — Thu, 19 Sep 2019 16:51:33 GMT

Perhaps you can use a cashback debit card such as Discover's for some additional revenue if you feel like opening a new bank account. You can get 1% back a month if they don't charge a surcharge.

Re: Daycare expenses via AMEX Gold for MR Points!

SouthJamaica — Thu, 19 Sep 2019 20:35:12 GMT

@randomguy1 wrote:
Perhaps you can use a cashback debit card such as Discover's for some additional revenue if you feel like opening a new bank account. You can get 1% back a month if they don't charge a surcharge.

OP said they charge a 4% surcharge!

Re: Daycare expenses via AMEX Gold for MR Points!

randomguy1 — Fri, 20 Sep 2019 01:36:43 GMT

@SouthJamaica wrote:
@randomguy1 wrote:
Perhaps you can use a cashback debit card such as Discover's for some additional revenue if you feel like opening a new bank account. You can get 1% back a month if they don't charge a surcharge.
OP said they charge a 4% surcharge!

Why the red and exclamation mark? I saw that and read that. I have seen some places surcharge a credit card and NOT a debit card. They are subject to different fees.

For example:

My electricity bill charges 3% on any credit cards vs no charges on a debit card.

Here's a bit of reading for you:

https://www.merchantmaverick.com/credit-card-surcharges/

Here's more data from the IRS that shows the fees are NOT nearly the same:

https://www.irs.gov/payments/pay-taxes-by-credit-or-debit-card

Re: Daycare expenses via AMEX Gold for MR Points!

SouthJamaica — Fri, 20 Sep 2019 03:26:45 GMT

@randomguy1 wrote:
@SouthJamaica wrote:
@randomguy1 wrote:
Perhaps you can use a cashback debit card such as Discover's for some additional revenue if you feel like opening a new bank account. You can get 1% back a month if they don't charge a surcharge.
OP said they charge a 4% surcharge!
Why the red and exclamation mark? I saw that and read that. I have seen some places surcharge a credit card and NOT a debit card. They are subject to different fees.

For example:
My electricity bill charges 3% on any credit cards vs no charges on a debit card.

Here's a bit of reading for you:
https://www.merchantmaverick.com/credit-card-surcharges/

Here's more data from the IRS that shows the fees are NOT nearly the same:
https://www.irs.gov/payments/pay-taxes-by-credit-or-debit-card

I have never seen that. Every place I have seen that charges a "convenience fee" charges it for debit and credit cards alike.

Re: Daycare expenses via AMEX Gold for MR Points!

althes — Fri, 20 Sep 2019 03:47:17 GMT

I hate places that surcharge, just not right in my book.

But yeah thats really steep.

Unless you really value MR or need to top up I would look for a 2% cash back card to use.

Re: Daycare expenses via AMEX Gold for MR Points!

K-in-Boston — Fri, 20 Sep 2019 15:57:28 GMT

4% is a very steep fee! I'm no stranger to paying for daycare and school tuition with credit cards, but either there was no fee or it was more in the 2.x% range, where it was at least a break-even proposition. Paying the fees only makes sense if the rewards outweigh the cost, or under other circumstances like where you needed just a little more spend to hit a signup bonus that you otherwise would not have had (again the rewards outweigh the cost), or needed to hit an annual spending amount on a particular card and the fee is worth it.

If you're unable to pay by check, I would consider an alternative like Plastiq if the fees are that much. It would be unusual to get at least 4 cents of value per MR point, buit if there's a particular transfer partner where you know that you can get that or more, go for it!

Re: Daycare expenses via AMEX Gold for MR Points!

VPExecutive — Fri, 20 Sep 2019 16:37:32 GMT

Daycare expenses of $1,500 a month and they have the nerve to charge 4% on credit card payments.

I would tell the sitter to take a hike.

Re: Daycare expenses via AMEX Gold for MR Points!

Anonymous — Sat, 21 Sep 2019 04:27:29 GMT

Hey everyone, thanks for the tough love and insight. I needed to hear that and I get it!

To follow up, the daycare uses the Brightwheel daycare app that not only keeps me up to date on the little ones, but is also used to process monthly payments. About 2 months in with my first child, the daycare announced a 3% surcharge for all CREDIT & DEBIT payments. I switched to checking via ACH right away, which doesn't incur a surcharge. The credit/debit surchage is now up to 4% for the fall 2019 school year. I hate that they do this but my DS loves this place so I guess I just need to swallow the fact that I won't get any points for it. ($1525/month now for 2, such wasted points I could cry) If I were to get one of the easy to get 2% cash back cards, I'd have to spend $732/year on the credit/debit surcharge just to get $366 back, and I'm not about that life anymore (except the only good thing is that it does act as a savings account but one that I'd have to pay into to get half back). There isn't a card in the world that will give me the 4% cash back to break even.

I'll have to find other ways to play this points game.

Thanks again!

Re: Daycare expenses via AMEX Gold for MR Points!

Anonymous — Sat, 21 Sep 2019 04:38:31 GMT

@K-in-Boston wrote:

If you're unable to pay by check, I would consider an alternative like Plastiq if the fees are that much. It would be unusual to get at least 4 cents of value per MR point, buit if there's a particular transfer partner where you know that you can get that or more, go for it!

Wow Plastiq sounds interesting... I'll look right into this! Thanks for the tip

Re: Daycare expenses via AMEX Gold for MR Points!

SouthJamaica — Sat, 21 Sep 2019 13:47:18 GMT

@Anonymous wrote:
@K-in-Boston wrote:

If you're unable to pay by check, I would consider an alternative like Plastiq if the fees are that much. It would be unusual to get at least 4 cents of value per MR point, buit if there's a particular transfer partner where you know that you can get that or more, go for it!
Wow Plastiq sounds interesting... I'll look right into this! Thanks for the tip

Plastiq charges 2.5%, so you wouldn't be coming out ahead.

Re: Daycare expenses via AMEX Gold for MR Points!

K-in-Boston — Sat, 21 Sep 2019 19:34:10 GMT

Yes, Plastiq base fee is 2.5% but it's pretty easy to get some fee-free dollars from them and they do have deals from time to time where the fees can be much lower. Likely not a good "use it every month" proposition, though, unless you are earning above the fee rate.

One thing that piqued my interest, though. You mentioned the payment is through an app; does it by chance accept mobile payments like Apple Pay or Samsung Pay? If so, there may be options to squeeze out a tiny amount of rewards. US Bank Altitude Reserve for example gives 3x points on mobile payments but that's 4.5% if redeemed for travel. Chase Freedom in the past has given 5 UR points up to $1500 in a quarter for mobile payments.

Re: Daycare expenses via AMEX Gold for MR Points!

Anonymous — Mon, 23 Sep 2019 01:00:31 GMT

@VPExecutive wrote:
Daycare expenses of $1,500 a month and they have the nerve to charge 4% on credit card payments.

I would tell the sitter to take a hike.

At 4% they are making money on the deal. I thought Rural Redneck Electric Coop and city water were bad with 2.45% and I use our US Bank 5% on them. Part of the problem is some some small vendors don't shop credit card processing and use places like square. One co I use a lot was gong to start charging. The reason was he was using square who were nailing him. I got him a deal under 3% for all swiped cards including Amex and now he is happy and no fee.

Re: Daycare expenses via AMEX Gold for MR Points!

iced — Mon, 23 Sep 2019 13:50:35 GMT

@Anonymous wrote:
Hi all,

Would the above be advisable?

Monthly daycare expenses for my 2 children will come out to about $1500 starting in October. The problem is, the daycare will charge a 4% surcharge for credit card processing. Would it be worth paying the $60/month processing for these yummy 1500 MR points?

These guys make it seem like its a good idea, but I don't own those cards: https://thepointsguy.com/guides/best-credit-cards-for-daycare-expenses/

P.S. Daycare expenses are using pre-tax dollars the first $5k via Dependent Care FSA, per year.

Thanks!

No, there's too many easy ways to get tons of MR points without paying surcharges. Over one year, that would be 18,000 MR at a cost of $720.

Also keep in mind TPG isn't some clever but generous dude looking out for your travel interests, he's a paid shill/influencer who makes money off convincing you to sign up for cards his advertisers want you to sign up for because POINTS! Points certainly have their use, don't get me wrong, but I would take all of their "good ideas" with a healthy dose of salt. Their point valuations != my point valuations != your point valuations, and unless you're redeeming those 18,000 MR at some really good valuations, it's not going to be remotely worth $720.

There's a reason there's that disclaimer on their pages that they are receiving compensation for you clicking through to their advertisers.

PS of my own - jelly on the daycare costs. Places closest to us wanted over $3,000/month for 1 kid and close to $6,000/month for 2 kids. We're commuting our kid an hour each way into the burbs just to find a daycare that's under $2,000/month.

Re: Daycare expenses via AMEX Gold for MR Points!

iced — Mon, 23 Sep 2019 13:52:58 GMT

@VPExecutive wrote:
Daycare expenses of $1,500 a month and they have the nerve to charge 4% on credit card payments.

I would tell the sitter to take a hike.

$1,500 for 2 kids is a bargain around here. I'd pay that every month of the year and twice in December if I could.

Re: Daycare expenses via AMEX Gold for MR Points!

SouthJamaica — Mon, 23 Sep 2019 15:56:40 GMT

@iced wrote:
@Anonymous wrote:
Hi all,

Would the above be advisable?

Monthly daycare expenses for my 2 children will come out to about $1500 starting in October. The problem is, the daycare will charge a 4% surcharge for credit card processing. Would it be worth paying the $60/month processing for these yummy 1500 MR points?

These guys make it seem like its a good idea, but I don't own those cards: https://thepointsguy.com/guides/best-credit-cards-for-daycare-expenses/

P.S. Daycare expenses are using pre-tax dollars the first $5k via Dependent Care FSA, per year.

Thanks!

No, there's too many easy ways to get tons of MR points without paying surcharges. Over one year, that would be 18,000 MR at a cost of $720.

Also keep in mind TPG isn't some clever but generous dude looking out for your travel interests, he's a paid shill/influencer who makes money off convincing you to sign up for cards his advertisers want you to sign up for because POINTS! Points certainly have their use, don't get me wrong, but I would take all of their "good ideas" with a healthy dose of salt. Their point valuations != my point valuations != your point valuations, and unless you're redeeming those 18,000 MR at some really good valuations, it's not going to be remotely worth $720.

There's a reason there's that disclaimer on their pages that they are receiving compensation for you clicking through to their advertisers.

PS of my own - jelly on the daycare costs. Places closest to us wanted over $3,000/month for 1 kid and close to $6,000/month for 2 kids. We're commuting our kid an hour each way into the burbs just to find a daycare that's under $2,000/month.

Excellent post.

BTW 18k MR's would be worth $216 to me. I think the Points Guy would value them at $306, but that would only be because he's calculating high end upgrades on expensive international flights, something most of us wouldn't have much use for.

Re: Daycare expenses via AMEX Gold for MR Points!

K-in-Boston — Mon, 23 Sep 2019 16:26:50 GMT

@iced wrote:
@VPExecutive wrote:
Daycare expenses of $1,500 a month and they have the nerve to charge 4% on credit card payments.

I would tell the sitter to take a hike.
$1,500 for 2 kids is a bargain around here. I'd pay that every month of the year and twice in December if I could.

+1, or +2 as the case was for me and daycare.

Re: Daycare expenses via AMEX Gold for MR Points!

Anonymous — Tue, 24 Sep 2019 01:30:08 GMT

@Anonymous wrote:
I'll have to find other ways to play this points game.

Thanks again!

I see that there is a Gold card in your signature...

...have you tried asking them to reclassify their business as a restuarant?