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ebetancourt

Line Up and Wait
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Feb 12, 2010
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695
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Middle Tennessee
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Display name:
Ernie
A long time ago I bought a car from the owner of the (small) dealership. I offered him an amount plus my trade-in. He told me the price of the car and what he was willing to offer for my car. (This was before window stickers.) I kept offering a difference, and he kept raising the offer on my car. I gave him my last and best offer, he said no, then raised the price on the trade so that the difference was less than what I offered. I took the deal, and as he filled in the paper work the light bulb went off. The look on his face was hilarious.

So today I went down to pick up a new car we had ordered. I don't carry a checkbook, but I offered to give him a debit card. He said, well, I'll have to charge you 3%. I pointed out that I was offering a debit card not a credit card. "Same thing" he said. So tomorrow I'll have my wife give them a check. It's her car and she likes, it otherwise I would be shopping for something else.
 
You do know that businesses have to pay a fee when you use a credit or debit card, right? Even for a debit card, that fee can easily be 1%, might be more depending how they are set up to accept card payments.
 
A lot of the time the debit card transaction fee is very similar if not the same of the credit card. Depends on how the merchant has negotiated with visa, Mastercard, etc. Along with what bank your debit card is with.

Presumably, the sum your charging is significant, and new cars aren't a huge margin business for the dealership..so that 3% can make a difference.
 
Are Debit Card Transaction Fees Regulated?
Some debit card transaction fees are regulated by the Durbin amendment, which was added to the 2010 Dodd-Frank legislation. This legislation caps the interchange rate paid to non-exempt card issuers at 0.05% + $0.22. A non-exempt issuer is, with some exceptions, a card issuer with assets worth at least $10 billion. The cap applies to both in-person and eCommerce transactions.

Debit Card Processing Fees: The Small Business Guide For 2020 (merchantmaverick.com)

In other words, while your local credit union or hometown bank is still free to charge whatever they want in the way of debit fees, large, national banks (such as Bank of America and Wells Fargo) are significantly limited in how much they can charge for the same transaction.

Non regulated fees are by card issuers less than $10 Billion in assets. So they would have paid .05% + $0.22. 3%, really? I would have been more than willing to pay that with a 100% surcharge.
 
ebetancourt said:
Are Debit Card Transaction Fees Regulated?
Some debit card transaction fees are regulated by the Durbin amendment, which was added to the 2010 Dodd-Frank legislation. This legislation caps the interchange rate paid to non-exempt card issuers at 0.05% + $0.22. A non-exempt issuer is, with some exceptions, a card issuer with assets worth at least $10 billion. The cap applies to both in-person and eCommerce transactions.

Debit Card Processing Fees: The Small Business Guide For 2020 (merchantmaverick.com)

In other words, while your local credit union or hometown bank is still free to charge whatever they want in the way of debit fees, large, national banks (such as Bank of America and Wells Fargo) are significantly limited in how much they can charge for the same transaction.

Non regulated fees are by card issuers less than $10 Billion in assets. So they would have paid .05% + $0.22. 3%, really? I would have been more than willing to pay that with a 100% surcharge.
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Your only talking about one part of the equation here. This article does a good job of explaining the whole equation.

https://www.cardfellow.com/blog/debit-card-transaction-fees/
 
I was addressing the transaction fee for my situation. Institutions not affected by the Durbin amendment can charge different fees.
 
ebetancourt said:
So today I went down to pick up a new car we had ordered. I don't carry a checkbook, but I offered to give him a debit card. He said, well, I'll have to charge you 3%. I pointed out that I was offering a debit card not a credit card. "Same thing" he said. So tomorrow I'll have my wife give them a check. It's her car and she likes, it otherwise I would be shopping for something else.
Click to expand...

When we bought a new car in Jan, I was prepared to write a check, but the dealer actually encouraged us to put it on our credit card so we could get the points. I told him I would have to split it over two cards. He said no problem. Didn't make sense to me, but I rolled with it. Then came home and proactively paid both cards so my payment hit the CC the same day the transaction did.

Maybe at some point they get a rebate? Or the float is better?
 
Van Johnston said:
When we bought a new car in Jan, I was prepared to write a check, but the dealer actually encouraged us to put it on our credit card so we could get the points. I told him I would have to split it over two cards. He said no problem. Didn't make sense to me, but I rolled with it. Then came home and proactively paid both cards so my payment hit the CC the same day the transaction did.

Maybe at some point they get a rebate? Or the float is better?
Click to expand...

I’ve done that but waited until the due date. No interest charged but the money got interest in savings until the due date.
 
ebetancourt said:
So today I went down to pick up a new car we had ordered. I don't carry a checkbook, but I offered to give him a debit card. He said, well, I'll have to charge you 3%. I pointed out that I was offering a debit card not a credit card. "Same thing" he said. So tomorrow I'll have my wife give them a check. It's her car and she likes, it otherwise I would be shopping for something else.
Click to expand...
Its your choice to find another dealer who won't charge you 3% to use a card. But keep in mind that if they aren't charging anything extra for using a card, that means they're charging extra for all purchases regardless of payment method.
 
Total fee would have been under $25. Unfortunately, the nearest other dealer for the brand is 50 miles away. I wrote a check for it today. Was further irritated by the myriad forms they put in front of me that didn't apply because we didn't finance. Oh well, it's a nice car.
 
luvflyin said:
I’ve done that but waited until the due date. No interest charged but the money got interest in savings until the due date.
Click to expand...

Yeah, I was too paranoid about missing the payment. The peace of mind was worth the few pennies of interest. The younger me would have waited....
 
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