Businesses accept credit cards to increase sales. Lenders don't need to increase sales, because you have to pay them anyway.

That is why companies that have a monopoly (electric utilities, the DMV, university housing department, etc.) generally don't accept credit cards. It won't help them attract more customers.

Hmm, the California DMV is the biggest agency of its kind in the nation and they prefer CC payments over anything else ;-) I understand you were generalizing as I can see that SoCal Edison for example generally does not allow CC payments.

True, maybe the DMV was a bad example. The CA DMV pushes credit card payments very heavily in order to get you to do things online instead of coming into their already overcrowded offices. However, they are an exception amongst government agencies. Tax agencies, passport office, etc. do not usually accept credit cards, but USPS does because they compete against private courier services.

I'll pile on :) My electric company (city owned) accepts credit cards. And I can pay my property tax, federal tax, and state tax with a credit card (albeit with a % fee).

Many business and municipal offices have learned that even without competition, credit cards can make sense for lots of reasons:

-reduce obstacles to receiving payment
-eliminate processing of paper checks
-avoid security problems of accepting cash
-reduce personnel in retail offices/phone banks to accept ACH/check/MO/cash payments

and plenty more.

Lenders are a different story. For one, they wield the power of tarnishing your credit report as an incentive to pay (as do some other businesses and municipal departments). But they also run on such slim margins that the credit card fee is just too significant.

Lenders also generally don't handle cash. For many retailers, part of the cost of the fee is offset by a reduction in cash losses. Even honest store clerks make mistakes. Plus there is a cost to process cash - keeping change in the drawer is a pain with regular trips to the bank.

None of these things apply to lenders - the alternative is usually sending a check or an ACH transfer, and many lenders will give you an interest rate reduction for setting up automatic payments.

I am surprised, however - that more lenders don't find a way to accept credit cards for a fee (where such fees are legal).

Municipally owned utilities tend to be better about accepting credit card payments. Silicon Valley Power (Santa Clara) does, but PG&E does not.

AMEX tries to discourage the practice, but you can pay your taxes with RedBird. I paid my property tax that way recently. The payee is usually not in their system, but you can add it manually, and they send out a check by mail. Still much better than paying 1-2%. ;)

Hi Majuki - Actually PG&E does allow you to pay by credit card with their EZ-Pay option. It costs $1.25 per transaction. Taking out the cost of the stamp if you were going to mail in your check (I don't know - $0.50 these days?) puts you at $0.75 to use your credit card. On a $200 bill, works out to $0.0038 per dollar - worth it for me. Of course it may not be worth it if you don't have teenagers in the house and your bill is less ;)

Our bill is substantially less, and I just use the e-check option. I should say that these utilities usually don't offer the option of paying via a credit card without an attached convenience fee. The cpm isn't there for me in most cases.

SCE offers the same "convenience option" via some kind of Chase pay service. Costs like $2 or so. Glad I can just pay via Evolve and drain my Buxx a little each month.

When I have utilities with flat service fees, like the garbage collection at my office, I just pay 10x at once and let the balance get whittled away by future bills.

In this era of no interest, it's worth it for me.

Anyone having problems paying with NW Buxx card? I keep getting the error:

Please check that the card information you've entered is correct (CA17)

I used it about a week ago for a payment. No problems.

I did too. They said it was because it's a payment over $200? I just got a MO and paid with my TMobile card. :)