Originally Posted by
abhilife2001
Hello,
I stay in a apartment complex where I can pay the rent by credit / debit card or cheque to the management company.. For credit cards, they charge about 2.5% extra.
I was checking these forums and seems plastiq was another way to send a cheque, but they also charge about 2.5% on credit cards, so I can directly pay thru the management company website online using my credit card as they charge the same fee.
Question is are there alternate (cheaper) ways to pay rent to companies thru credit card without incurring 2.5% or higher as fees.
I am new to this MS stuff and want to get some minimum spends target's reached, so any guidance would be appreciated.
(I am already looking at the MS routing for GC's but need to read more of that for now; ) )
Thanks, A
Well, most people consider using this kind of stuff just for minimum spends (to satisy credit card signup offers) to not exactly be MS.
And a lot of people find the 2.5% fee much easier to swallow on signup bonus minimum spend than on "true" MS.
Here's the reason: On true MS, it's tricky to get much more than 2.5% in value form your spend. If you're earning cashback at 2%, you're losing money if you have a 2.5% fee. If you're earning cashback at 3%, you're barely just earned net 0.5% with a 2.5% fee.
But if you're spending, for example, $1000 to get a $300 signup bonus, that's the equivalent of 30% cashback. A 2.5% fee on 30% cashback still leaves you with net 27.5% cashback.
And while cashback earning is the easiest to show the math for, earning, say, 60000 airline miles for $3000 in spend is similarly "astronomical" (though temporary) earning ratio, compared to everyday spend which is probably only 3000 miles for $3000 spend. So the same concept holds true, 2.5% of $3000 is $82.50, and if spending an extra $82.50 isn't worth getting 60000 bonus miles (if you couldn't get the bonus miles without that), isn't it worth it? Surely you must be able to get
way more than $82.50 value from 60000 airline miles, even at the worst miles redemption rates possible.
There's no "true MS" (ie, day to day MS not involving minimum spend for signup bonuses) that can get anywhere close to the rate of return that minimum spend for signup bonuses does. So that's why wth "true MS" a 2.5% fee can be marginal. But for the minimum spend for a good signup bonus, it should be comparatively negligible, when compared to the value of what you're getting (especially if you couldn't get that signup bonus without doing this).
So do you own math on your own minimum spend and what you get for it, and see whether 2.5% really matters
in that case.
And then balance that by the convenience of being able to do it with one of those 2.5% fee solutions, compared to the many steps involved in trying to do it at a lower rate.