Just how much extra DOES the merchant pay for accepting a card?

[attimo]

Hi there,
first posting here!
(Sorry if I have missed the info I'm seeking somewhere else in the forum)
I am thinking of paying for my new car ($40,000) with my credit card.
I accept that the merchant pays a fee for accepting my card, but just how much is that fee?
I found a link to the RBA website which indicates that the total fee (merchant sevice + other fees) for VISA is 0.95% and for AMEX 2.27% of the purchase price. Does this sound right?

http://www.rba.gov.au/Statistics/Bulletin/C03hist.xls


So I figure that the extra cost of buying the car should be 40,000 * 0.0227 = $908. added to this the cost of the card which is $295 bringing the grand total to $1203.

Given the 4pts/$ introductory offer, that should be 160,000pts at a cost of $1203.

(Thats 62.5% of the points required to go SYD LHR in Business. the equivalent dollar value for that is $5975)

Sounds good, right? Or am I missing something?
(that is IF the dealer accepts MY figures for the charges)

 

[Chicken]

That's just average. The rate ranges from just above 0.5% for large volume merchants, to over 7% for small / high risk merchants

 

[beardoc]

Hello attimo, welcome to the Australian Frequent Flyer Board!

As Chicken mentioned, the fees that Amex and the banks charge vary quite a lot - I know in my industry being a member of the AMA, I can get a Commonwealth Visa/MC/Bankcard merchant facility for a merchant fee of 0.85% including GST, and accept AMEX for around 1.49% plus GST (1.64% all up).

However, given you mentioned the 4 points per dollar and the $295 annual fee, I think you might be talking about having the Westpac Altitude AMEX Card, which gives you 4 Altitude points per dollar, so on a $40,000 purchase, you will get 160,000 Altitude points, which because they convert to QANTAS Frequent Flyer Points at 2:1, you will get 80,000 QFF points from this transaction. This is only 62.5% of an ECONOMY flight to London, not Business Class.

This might make it less economical than you have thought.

The only way to know how much extra you will pay on the car with a card is to ask the dealer themselves.

 

[Yada Yada]

Yes, it varies by card type and by merchant. We put merchant facilities in our business (building products industry) some years ago and initially paid about 4.5% fees but have since negotiated them down to around 2.9%. I think the rate depends a lot on the volume the business puts through on cc's. It's up to the merchant as to whether or not they pass on a charge to the customer.

 

[NM]

I was able to put the deposit for a new car on my Amex card without any additional charges from the dealer. But it was not a $40,000 deposit!

And if you are using an Amex Credit Card, unless you have a $40,000 credit limit, Amex will not allow it in a single charge. Even if you have, say $20,000 credit limit and pre-pay a further $20,000 into your card account, they will still not permit a single transaction greater than the card's credit limit. I am not sure if this is common with all credit cards, but it is for Amex.

 

[aus_flyer]

And if you are using an Amex Credit Card, unless you have a $40,000 credit limit, Amex will not allow it in a single charge. Even if you have, say $20,000 credit limit and pre-pay a further $20,000 into your card account, they will still not permit a single transaction greater than the card's credit limit. I am not sure if this is common with all credit cards, but it is for Amex.

As far as I am aware, it is only common to Amex.
Visa certainly allows you to "top up" then then make a purchase for greater than your $ limit.