Do you still use credit card even when there are fees?

genesis on 02/02/2024 - 10:04

If the fee to use your credit card is equal or lower than your earn rate, do you still use your credit card?

For instance the Amex Plat Airpoints earn rate is 1.69%, and if you're paying for something that is charging a 1.5% fee, would you still use your credit card?

Reason for asking is because I believe the more you spend on your credit card, the more the credit card companies like you? (Eg. likely to get targeted offers from Amex / better retention offers if you decide to leave). If that's the case you should always use your credit card if the fee is lower or equal than the earn rate?

This also assumes that you are paying off your credit card in full every month.

Curious to know what others do.

General Discussion

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  • akhmed on 02/02/2024 - 11:03
    +3

    Only a handful of places that I go to charge a a credit card fee ( restaurants/small dairy shop etc) and here I pay with my debit card.

    I pay my Groceries/Internet/Mobile/Rates/Waterbill/Fuel with credit card so thats 99% of my spending.

    • genesis on 02/02/2024 - 11:09

      Same applies to me, however I've got a few big ticket items coming up to pay for (insurances and rates), which charge fees. It's easily going into thousands, and was thinking, may as well just pay it with the credit card too.

      • akhmed on 02/02/2024 - 11:11
        +2

        You can still do that on credit card. I pay AA insurance with my credit card. And for rates go to a Council service desk and pay with your credit ( psst! they dont charge a credit card fee even though it says on the website).

        • genesis on 02/02/2024 - 11:39

          Nice tip, thanks! (I remember reading another comment here on cheapies a while ago about paying rates over the counter, completely forgot about it haha)

        • ace310 on 02/02/2024 - 11:51

          Never knew this. Where is/are the council service desk in Auckland? Is it library or something else?

        • Madao on 02/02/2024 - 16:45

          Can you pay rates with Amex or is it Visa / MC only?

        • Stoffel on 02/02/2024 - 21:52

          Are you sure? Last time this was mentioned on Cheapies I went to the Manukau service desk and was told that I would be charged a fee

        • gooddeals on 04/02/2024 - 00:58

          I think council does charge fees for rates over the counter, but at a lower fee..

          https://www.aucklandcouncil.govt.nz/report-problem/visit-us/…

          Payment options
          Eftpos.
          Credit card (Visa, Mastercard and American Express). A card payment fee of 0.67 per cent of your payment amount applies.

        • kyogui on 06/02/2024 - 13:00

          Auckland council?

          • gooddeals on 06/02/2024 - 23:32

            @kyogui: yes Auckland council, but that applies for the Auckland wider region, includes Manukau.

        • Avantime on 12/03/2024 - 14:43

          There's a possibility that the card fee has to be manually entered into the eftpos machine, but the staff forgot.

        • jackvdbuk on 05/08/2025 - 11:56

          To confirm library now charge when selecting cc but it appears to be .67 percent (not 1.6x on website it states) as spam mentioned

  • CrashAndBurn on 02/02/2024 - 11:05
    +3

    Whenever there is a surcharge, I either do debit or cash.

  • nzmax on 02/02/2024 - 14:32
    +3

    I never use if there is a surcharge. I don't even consider any points as that is just a bonus, because you often end up using them on things you don't need. But my current card doesn't have points anyway.

  • Alan6984 on 02/02/2024 - 15:37
    +3

    If the points value (which is, effectively, cash to us) is greater than the fee, then I would not hesitate to use the credit card.

    If it is not, then it has to be a depends, as sometimes the protection you have by using a credit card is worth something.

    Having said that, for online purchases with counter-parties that I am not sure about (which is most!) I would only use a Wise virtual card, and then the safety is worth a small fee if that is applicable, but it seems I'm hardly ever (or can't recall at least) seeming to run into fees online compared to physical stores. I'm sure there are loads though.

  • akrotohur on 02/02/2024 - 16:08
    +1

    No, if there's a fee, I'll either use eftpos or cash

  • Madao on 02/02/2024 - 16:52
    +1

    I did wonder the other day about ditching the CC altogether and just use EFTPOS.

    Thoughts are it's effectively giving yourself a 1 - 3% pay rise each year (on the total of your pay you spend on card). Handy in these high inflationary times with low annual pay review awards.

    Then I considered the value I was gaining from using a CC - offset of interest, perks my cards offer etc - but then also the annual fees charged.

    It all got too complicated and I just decided that either way I'm a consumer and corporate greed will no doubt find some way to get the better of me either way I went.

    That said, the better half and I are flying Singapore airlines Premium Economy to Singapore later this month and Business Class on the return leg, upgraded from Economy tickets solely with Amex points accrual. Depending how that experience goes it will probably shape future card spending habits.

    • Alan6984 on 02/02/2024 - 17:21

      I would suggest keeping a credit card for making some purchases as you get more protection using that than a debit card / direct credit, and especially online.

      I would never give out card details online that allow access directly into your bank account, unless that account itself is very restricted in terms of the dollars in there (an amount you could live with losing albeit reluctantly). Much better to nominally owe the bank for fraudulent charges, than have to try to get you cash back from a debit card transaction.

      I'd still preferentially use a Wise virtual card for online purchases though, so maybe you could ditch your other credit cards, and just use that instead.

    • kyogui on 06/02/2024 - 13:09

      If you are paying interest on the CC purchase then it's not worth it.

      • Alan6984 on 06/02/2024 - 21:35

        If you are paying interest on credit card debt, then it seems likely you either don't have any choice, or are just plain feckless.

  • gardengirl on 04/02/2024 - 23:06
    +1

    If it's for a flight ticket, I would also consider the benefits of cc insurance cover. Like ANZ Platinum, it requires 50% travel cost paid by cc to be eligible for cover. Whilst BNZ Platinum, the travel costs are not essentially paid by BNZ cc. As long as the cardholder has the card live at the time of travel and claim, the cardholder and partner are covered. In that case, the extra surcharge costs way less than a separate travel insurance policy.
    In terms of Rates, the Council charges 1.5%, greater than my cc cash reward. When the mortgage interest is low, I always choose to pay Direct Debit. However, right now mortgage rate is pretty high and it may end up costing a bit of interest on my revolving account (I'm paying more than one property). Have to calculate the net cost to make a decision.

    • kyogui on 06/02/2024 - 13:12

      Last time i travelled with Air NZ it tried to charge me $15 per ticket so for 3 people return flight it will cost $90 for CC fees.

      • gardengirl on 11/02/2024 - 15:54

        $15 each trip is Air NZ charge by collecting payment via credit card. You still have options to pay in other method to avoid fees.
        which bank do you hold your cc with? Bank-to-bank travel insurance policy may vary as I mentioned above ANZ vs BNZ. If I were in your situation, domestic flights, I would opt out of cc, and pay by Poli to avoid the fee. For overseas, if you don't have BNZ, then $90 is already way cheaper than buying travel insurance for 3 ppl, in my opinion. cheers.

        • kyogui on 12/02/2024 - 10:19

          Simply pointing out if you pay by ASB Visa Platinum Rewards card you get travel insurance but it may not be worth doing due to the CC fees.

  • coach on 06/02/2024 - 20:09
    +1

    I use my TSB Platinum for purchases where the fee is less than 1.4% or if I think the price and purchase protection makes sense for the purchase.

  • Meridian on 08/02/2024 - 16:18
    +1

    The ASB Platinum true rewards rate is equivalent to 1% so if its under this your winning, ie Contact Energy fee is .95% over it and your paying. In this case its a wash.

    Then it depends on what your buying, travel you get the insurance etc.

    Then it depends on the hassle level to pay other ways

    Then of course the size of the transaction thus the fee, if its cents then not worth the hassle to worry, if its a 5k lounge suite then for sure worth avoiding the fee.

    and that is all is based on the fact I dont actually need the credit, I guess some people are spending it for that reason alone.

  • AleBeerenhoff on 02/02/2024 - 10:29

    I am lazy so don't tend to overthink it, and just put everything on the card and then pay it once a month. Easy. The fact I get a kick back/bonus is handy. I am sure that there is probably a more cost effective way to do it (to maximise the interest gained, and minimise the interest paid), but I am too lazy :D

  • Stoic on 02/02/2024 - 11:16

    I used to not care very much as long as the surcharge wasn't much <2% and depending on what I purchased.

    I have an ANZ airpoints platinum card so will put international flights on it even with the surcharge so that I can get the included travel insurance.

    I'm a bit more careful when now with the surcharges as the earn rate has dropped, you can't earn status points on non-flight purchases, and now you don't get free lounge passes for spending x amount.

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