Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
What is Convenience Fee?
A charge assessed by a payee when a consumer pays with a credit card rather than by check or Automated Clearing House (ACH) transfer. Convenience fees can be a fixed dollar amount or a percentage of the transaction amount (usually 2% to 3%) and must be disclosed to the consumer in advance. Types of payments where the payee typically charges a convenience fee include mortgage payments, property tax payments, college tuition and taxes.

BREAKING DOWN 'Convenience Fee'
Suppose you want to pay the IRS by credit card. The IRS will accept credit card payments through several different payment processing companies, and they all charge convenience fees. One might charge 1.88% with a $2.75 minimum, while another might charge 2.35% with a $3.50 minimum. Thus, if you need to send the IRS $2,000 and you wanted to pay by credit card, you’d pay a convenience fee of 0.0188 × $2,000 = $37.60. If, for some reason, you only wanted to send the IRS $2.00 via credit card, you would pay the minimum convenience fee of $2.75 instead of 1.88%.

Some people might not mind paying this convenience fee if doing so will allow them to meet the minimum spending requirement to earn a credit card sign-up bonus. Other people might be willing to pay a convenience fee to keep an important account current when they don’t have enough money in their checking account to cover the expense; the consequences of carrying a credit card balance are generally less severe than the consequences of not paying your taxes, for example.

In most situations, it is best to avoid spending money on convenience fees. Even if you have a cash back credit card, it probably doesn’t offer a higher cash back percentage than the convenience fee percentage, so you won’t come out ahead.

Credit card convenience fees are not the same as credit card surcharges, which are the charges some merchants impose on consumers who pay with credit instead of cash. Both convenience fees and surcharges serve the same purpose, which is to discourage consumers from paying by credit card and to offset the fees that credit card companies charge payees to process credit card payments. Surcharges are banned in 10 states, including California and New York. In states that allow them, vendors must disclose them up front and must not charge more than 4% of the transaction amount.

Accounting Application

A lot of people didn't know about convenience fee and forget to include them in your tax. This is what we does, every small single details are factored in.

These small fees could help you save many $$$ when it come to taxes, and it is always reasonable to use credit card in your business.
I always pay extra fee with air ticket, hate to say this but shouldn't credit card give us convenience and all extra work to take care of convenience fee become troublesome?
Convenience fee will be charged together with the receipt, you don't have to do anything extra what
It is the fee that gives you convenience. 

For example if you go to the bar and you paid the convenience fee, they put you beside the toilet.

If you didn't pay the convenience fee, you will be among the cheapo who are furthest away from toilet, and trust me when I say the waiter will force you to drink more water - they just refill your water every single time and look at your with their killer stare "drink what i pour for you". You are almost dead.
I think so far I only see airline charging convenience fee.

Forum Jump:

Users browsing this thread: 1 Guest(s)