<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Snowcap:
Bocastephen - I don't see how your company would be able to afford to pay the merchant fee (AKA discount rate) that would average 1.75%-2.00% for Visa/MC and anywhere from 2.50% to 3.25% For Amex. According to Amex' financials, their AVERAGE discount rate is around 2.7%. I don't know how you could ever make money on that, but more power to you if you can do it.
Snowcap
[This message has been edited by Snowcap (edited Mar 15, 2004).]</font>
Hi Snowcap. The math would run something like this:
Assume an average PITI payment of $1500/month...a 3% cc processing charge on this would be $45. We can service for 4 months, so the total cost to us would be $180 - given average broker compensation is about 1.5pts on the loan face amount, this is easily covered and would not impact us at all - just a small cost of doing business. From a cost/mile perspective in this example, it would be 6000 miles/$180 or .03/mile. If it were an open-ended arrangement, that would be a problem. 360 months x $45 is $16,200 - that would definately be a no-go.
The other programs I am developing are based on the principle of "sharing" compensation or rebating a portion of the lender-paid broker fee back to the customer in the form of a travel rewards, or leveraging the use of loan points to earn tax deductable travel rewards. More info to follow once everything is on the web and checked over.
[This message has been edited by bocastephen (edited Mar 15, 2004).]