There are some things I don't use my credit cards for because a "convenience fee" is charged and it's more than the miles or points are worth. However, I got my state vehicle renewal notice in the mail, and I see the "convenience fee" has now been waived. So I'm picking up some SPG points for paying my car registration and taxes.

Is anyone else noticing people beginning to eliminate "convenience fees" or is this just one state trying something? I'd love to see it. I assume they're doing it because they've decided that the cost per transaction of accepting credit card payments is less than the cost per transaction of opening envelopes, processing checks manually, and dealing with bad checks.

I'm in Kansas, and my car licenses did away with the convenience fee this year.

What state are you in?

Anita

I just paid my North Carolina vehicle tax, no convenience fee. I think my vehicle registration is the same.

In Duval County, Florida (Jacksonville), where I own property, there's a 2.5% convenience fee to pay property taxes.

It's the reverse here. Around 3-4 years ago the state "outsourced" all the credit card payments to a third part, whose cost you 100% incur. The good news is it's reasonable (2.something) and now credit cards are accepted for just about every state government transaction.

There is a trend though for the credit card companies to offer "special" processing rates to certain emerging markets that they don't traditionally have a stronghold in. Sometimes they are very aggressive (ie:1%).
Things like:
Utilities (mandatory -- power -- water -- not entertainment: Cable/TV which get charged a high rate).
Education/tuition
Government services/tax payments.

Finally, one oddball one is grocery stores have always been low. I don't know the history on that, maybe its just low margins, but the grocery store rate is ridiculously cheap compared to other merchant industry codes.

A little off topic but one strange one was the US Government GSA. They used to take a CC for anything. You could buy 10 cars from them at an auction and put it all on your AMEX. In the last year they've limited it to $49,000 per 24 hours, but still... it's an oddball.

Kansas too.

My municipal electric bill used to have a $3.95 convenience fee if one wanted to pay with a credit card since they were outsourced to an outside company.

About two years ago, they did away with that when credit card payments were now able to be done solely within the municipal electric agency. ^


Unfortunately my local gas company still doesn't accept payments with a credit card. So for them, still direct through my bank's online bill pay.

My electric company still charges the convenience fee, but the water company does not.

I did have to pay a fee for my license plate renewal in Illinois.

No such trend here in NY. Electric and gas, gas stations (pure scam if you ask me), every state agency--all charge a fee.

In many cases, not charging a fee is a common sense way to save other costs. The California DMV has allowed registration renewal online via credit card with no fee for several years. 3 minutes on the web, nothing to send in, and a few days later the new stickers arrive. I'm happy and resent them less. And for them, nobody to open and type in info to process a check, no clerk to wait on me in the office, etc; that overhead savings has to come close to paying any credit card costs.

If only the county would be so enlightened for the property tax bill...

I think on low dollar value items, it might be worth it as interchange fees fall. But doubtful we'll see it on tuition/taxes soon because few people even have super large limits anyways

Problem is that U.S. credit card fees to banks, Visa, Amex etc. are way too high to vendor. Around 2% more or less with higher fees for reward cards. This does not reflect cost of running system, but, more, oligopoly rent extraction (including our much beloved credit card miles bonuses ).

In other countries (for example, France), reflecting the actual tech efficiencies and other factors merchant fees are very low, approaching zero in many cases.

In the US, government "vendors" are often prohibited from accepting any thing less than is owed, thus, no payment by, say, local property tax collector, to card company is permitted. You have to pay the "convenience" fee if you want to use a credit card.


In other words, don't hold your breath waiting to be able to pay your property taxes with your credit card without the added fees.

I've seen somewhat the opposite especially in the case of many educational institutions in the payment of tuition. Also, has anybody seen a case where educational institutions treat tuition payments as cash advances meaning the customer incurs high fees from the outset and interest begins to run immediately? Same might be true for tax payments to taxing authorities although I haven't seen that.

Here in NY I paid my daughter's SUNY tuition with no fee. They even accept AMEX!