About a year ago, I was working in Canada. A co-worker wanted to visit his brother in Japan, so he located a cheap ticket, about $1000. Then he found out he needed a US credit card, which he didn't have. So, I put the ticket on my Diner's Club card, and he paid me in cash. He got the ticket, and I got the miles.

Now, there's a couple of my co-workers who are going to buy new cars. The price tag will be between %15,000 and $35,000. I suggested they look into putting the tab on their credit cards and get the miles. They did not seem interested in miles. Since these would be essentially cash transactions, I suggested that I could buy the cars with my credit card, and they could pay me the cash. The cars, of course, would be in their names. My only function would be to "launder" the money and get the miles.

Is this legal? If they have cash in hand, would you recommend it? Might I have to pre-load the card before the transaction?

The card(s) I have in mind are my BA Visa card or my Diner's Club. Advice appreciated.

We recently bought a new car and found that the dealers have a maximum amount they would accept in the form of credit card payments. we were able to make a $5,000 down payment with a credit card.

We also experienced a $5000 NW Worldperks Visa credit card charge limit from a motorcycle dealer where we wanted to charge over $10,000, i.e., the entire cost of the bike and had the credit to cover it on the card. I don't know if the restriction comes from the dealer or from Worldperks and other similar frequent flyer miles credit cards.

What I'd LOVE to charge or "launder" every month without cash advance fees on miles credit cards would be our San Francisco Bay area mortgage payments! We'd be flying first class at will if those enormous charges could generate miles. :-)

There are a few threads discussing the mortgage issue. I have not come across an case where a mortgage company/bank will accept a credit card payment.

From what I can tell, the best situation is to open an AA AAdvantage Mileage Checking Account. I have just applied for it, so I am waiting to see if I understood the terms correctly. As I understand it, you get --

-- 0.50% Annual Percentage Yield (APY) for balances $10,000.00 and greater
-- 0.25% APY for balances between $2,500.00 and $9,999.99
-- 0.00% APY for balances less than $2,500.00 (with a fee of $15.00/month)
-- $100.00 minimum opening balance
-- Free Bill Pay
-- Free TM Card upon request
-- Four (4) reimbursed ATM withdrawals per statement cycle (up to $2.50 per transaction)

-- Earn 1000 miles for opening a Mileage Checking Account
-- Earn 5000 miles for signing up for payroll direct deposit into Account
-- Earn 2000 miles for using bill pay service for 12 months
-- Earn 100 miles for every $1000.00 maintained per month in your Account

As I see it there are pros and cons --

PRO
-- miles for keeping $$$ in the account
-- reimbursed for 4 ATM transaction/cycle (month)
-- miles for bill paying (only need 1 recurring bill to qualify) and direct deposit

CON
-- rather hight minimum balance to avoid monthly service charge
-- interest rate not the greatest

You could accrue miles by using this account primarily to pay bills (and keep a higher balance = more miles/month). Or at least transfer your mortgage payment from you regular checking account to this account a few days before the payment is due, and use the automatic Bill Pay.



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Da DOK

Most car dealers will accept $5K max on a CC. You're lucky if you find someone who'll take more than that.

I recently bought a car and put $10,000 down on my credit card. I would have put the full $30,000 cost of the car on my Discover card but the dealership limited me to $10,000 because they said that they have to pay 2-3% in transcation fees to the credit card company and obviously this would put them out ~$750 on a $30,000 charge. Oh well, I was happy enough anyway to charge $10,000 on my Discover to get my $100 Cash Back Reward. What made me feel even better is knowing that the car dealership had to pay $250 in transaction fees so that I could get that $100 cash back. Yep, I think car salesmen are a bunch of crooks and knowing I was screwing them out of their $250 MADE MY DAY after all the crap I had to go through buying a car from them!

There is nothing illegal or improper about using your credit card to make a purchase for someone else. However, unless you are extremely comfortable that you will be repaid promptly, you may wish to get the cash upfront.

I've purchased 3 vehicles in the past with a credit card but in each instance I made this agreement prior to going out to the dealership. The actual discount rate that most dealerships pay is approximately 1.6% and the sales people who tell you 3% just don't have a clue. They are just repeating what the business office told them because they really don't like to accept credit cards.

One of the main reasons is because of the recourse you have through the credit card issuer should you be dissatisfied with the purchase after delivery.

Everything is negotiable when it comes to car dealers.

If you want to charge the whole thing badly enough, they will let you do it, provided you make it worth their while to do so. You may have to give back some of the great price you negotiated (you did ignore the sticker and negotiate up from the dealer's cost, didn't you? ) or pay some or all of the 1.6% or whatever it is the dealer has to pay on CC transactions....

But remember, it's ALL negotiable.

If a car dealer is willing to take your credit card, then you know you didn't get the best price.

Renegotiate another 5% off and pay cash or finance through a bank.

[This message has been edited by Rut Dog (edited 08-28-2003).]

Who cares who is paying for the car? All the dealer wants is his $$$. It's an excellent idea and if you trust these people enough not to have YOU ending up with the bill then I'd go ahead and do it.

I don't know enough about taxes in the US but I would look into making sure the IRS stays happy with you....

[This message has been edited by ScottC (edited 08-26-2003).]

Agreed 100%.
If they have lots of room in the price still and all it takes to close the deal is to let u use your CC then they will do it. Otherwise you know you didn't negotiate as good a price as u could have.

I would suggest negotiating your best price as if paying cash, then offer to pay with credit card and covering their 3%. Their profit would still be in the amount your negotiated over their cost plus the holdback that they also receive.

Agreed. Same holds true for mortgages and most other financial products. It's a trade-off if you want the miles.

This may be somewhat off-topic (imagine that, huh?) but if you or your co-workers are buying a car there is a new (I think) site that offers miles from participating dealers.

Not many dealers participate yet (Only 3 in Oklahoma, for instance, but they happen to be 3 big ones)..

So if you are going to buy a car from a certain dealer anyway, maybe check this site to see if that dealer participates with dealermiles.com

A buddy of mine sent me the link. He said it's a brand new company offering these miles. I don't know anyone who has actually bought a vehicle in this program, so I don't know how good it works.

http://www.dealermiles.com/

[This message has been edited by jmartin (edited 08-26-2003).]

I took the best refi offer I got from another lender (that gave no miles) and emailed it to Amex/PHH mortgage. They matched it and still gave me the MR points. You can always negotiate.