Charging a 9.95 "Convenience Fee" to use your credit card ?

[disisus]

I went to renew my homeowners insurance online by credit card and it said I would be charged a $9.95 Convenience Fee.

The bill did not say there was any additional charge for paying on-line.

The bill did say that other options for payment were to pay in full by cheque ( no extra fee ) or pay in installments with an additional $5. per payment.

I find this very deceiving. What if I had waited until the last day to pay, assuming I could pay by Credit card and not knowing they would charge me an additional 9.95 to do so. That's the same charge as paying by cheque in 3 installments.

The Insurance companies web site says it's the credit card companies charging the "Convenience Fee". So all the credit card companies are now charging the same "convenience fee" to use their card?. Whether it's Mastercard or Visa or American Express.???

Has anyone else encountered this?

[pierrelebel]

"The bill did not say there was any additional charge for paying on-line."

We have the same thing here on property taxes.

You can pay online (from your bank account) at no extra charge.

However, if you pay online from a credit card.... they charge whatever it costs them to process the payment (about 2.5%).

[disisus]

You can pay online (from your bank account) at no extra charge.

However, if you pay online from a credit card.... they charge whatever it costs them to process the payment (about 2.5%).

The message I got was that their paying online from your bank account wasn't currently available so please use their credit card service. It seems to be a third party service that charges a fee to process credit cards. 

It was a totally unexpected charge. No mention of it on the bill at all. Even the extra insert card they included in the billing statement on billing options didn't mention it. They made it sound like you could just go online and pay your bill in full for the amount they stated. When in fact it was the full amount they stated plus $9.95 for the credit card convenience fee.

I just think it's wrong not to tell you about that before you go to pay. I'm sure a lot of people go to pay in the last few days before the due date and are left with no choice but to pay the convenience fee. Mailing their payment at that point would probably arrive too late.

[pierrelebel]

"I just think it's wrong not to tell you about that before you go to pay."

I totally agree with you.

[reallynicestamps]

Hmm.

I seem to remember way back when credit cards were new, Canadian Tire got into an arguement with some cc companies because they were charging more to pay by card than for cash.

Canadian Tire money (discounts) were involved somehow.

At any rate, the cards won and if I recall correctly, businesses cannot charge extra for the use of cards. Most businesses quickly realized that it was in their best interests to get the impulse shoppers who would use a card over the careful buyer who waited until he had cash in his pocket or the customer whose cheques might or might not bounce.

I'd be asking your insurance broker, in person or on the phone, just who is getting that fee. I really doubt it is the card company nor that the card is charging that amount.

[tobyshitzu]

Its not the credit cards companies directly charging the convenience fee (credit card companies are getting their normal % fee).  They have likely done what a lot of municipalities did when they started taking credit cards, outsourced it to someone who does.  This is in fact  allowed by mastercard in some situations 

https://www.helcim.com/support/?article=172

[tobyshitzu]

This is how the city justifies it

"The City has partnered with Paymentus Corporation to provide the convenience of making payments by credit cards. Paymentus is a third party automated bill payment service that accepts VISA or Mastercard. You can enjoy the convenience of making your payment at any time on any day. Paymentus will charge a convenience fee for each transaction."

 then you click through to paymentus site

"Please note that Paymentus Corporation charges a service fee of 2.65% for the use of its software and service to pay your bills. You must approve the payment of this fee to complete your payment. "

Which is careful to claim you are paying for "their software" without mention its passing through the cc fee 

[nuvistors]

Home Hardware  charges a $4.00 fee for  paying your account online from a bank account.    They will not accept  CC for account payments.

[boinger5]

Does Ebay now charge an extra fee I have use my Visa directly for ebay purchases instead of going through the Paypal process?

[pierrelebel]

No. 

eBay does not charge extra whether you may your monthly fee invoice with your credit card (that should be the preferred method by all sellers) or PayPal.