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Old Mar 26, 07, 6:58 pm
Join Date: May 2006
Location: Southern California
Programs: IML Gold, SPG LTPE, WOH Globalist, Starbucks Gold
Posts: 573
Originally Posted by sxc View Post
Wouldn't your buddy get charged the merchant fee? Hence someone is losing out (either him, or you if you reimburse him the merchant fee)?

If he doesn't own his company, then ethically, he would be doing something wrong by purchasing stuff using his company's resources which are not for his company's business.
He does own his company, I own mine, we both buy and sell from each other. Instead of doing inventory "trades" and credits we charge each others credit cards. Why write each other checks. The whole mileage thing is just an added bonus, a loophope we inadvertantly discovered.

We both are "B2B" companies, and my clients settle with credit card. I dont give terms because the amounts are too large, and the cashback we get are more than the discount fees. It took me awhile to find out why, but you'll notice that CC company rewards are almost always higher than what they charge in discount fees. Why? Think Interest. 12%, 14%, 19%, 25%, 30% APR is what they are after. Not to mention the "late fees", "overlimit fees", etc. Our balances are paid 100% each month, but BS fees account for almost 40% of credit card company revenue. On the other hand, spending and paying off $30-40k a month on CC spikes credit scores, not that it matters

Our discount rates are about 1-1.25% and merchant processing companies fight each other for business. They come in, look at my statements and almost always give promotional offers to switch over. One company offered 0% discount rate for 6 months with no commitment, and almost always before the term ends, someone else would throw an offer. So, during slow season, I talk to credit card sales people and make $$ by switching back and forth.

On the other hand, I hear that CC companies in asian markets are offering even better incentives due to it being a developing market for them. My trading partners in Taiwan have these credit cards that you have to have networth to qualify for, and in return they give you free business class for the price of economy. Anyone want to chime in on this?

Finally... a supplier of mine pay for their $50-100k monthly Fedex bills and switch them off between 1-2 dozen CC's to get the benefits. I envy him
buylowsellhigh is offline