Is paying a credit card surcharge worth the points?

[AmtrakBlue]

Trying to decide if paying my rent & utilities (bundled) is worth the $35 credit card charge.

If I did my sample calculations right, it looks like I'd get almost twice as many points than the charge.

EG: $1300 for rent & utilities
$35 credit card convenience fee
2 points per dollar
Point value is 2.5 (per the points guy)
$2600 * 0.025 = 65 points

I have paid my rent in the past a few times, like during double points days, but wonder if it's worth it to pay by cc every month...which would help get the 1000 TQPs / $5000 spend. Not that I care a lot about getting back my Select Plus as that's a nice-to-have, not a need, for me.

 

[Devil's Advocate]

Point value is 2.5 (per the points guy)

The way people like TPG reach these estimates is to price out the most expensive trips available. If you primarily book the most expensive high-bucket bedrooms then those calculations may be reasonable, but if you mostly book coach and low bucket bedrooms then that estimate is likely irrelevant. Your estimated value (the only estimate that is relevant for this) is the points/cash ratio for trips you would have paid with actual cash if AGR points never existed.

 

[AmtrakBlue]

The way people like TPG reach these estimates is to price out the most expensive trips available. If you primarily book the most expensive high-bucket bedrooms then those calculations may be reasonable, but if you mostly book coach and low bucket bedrooms then that estimate is likely irrelevant. Your estimated value (the only estimate that is relevant for this) is the points/cash ratio for trips you would have paid with actual cash if AGR points never existed.

I just checked one segment of a trip I already have booked at today's prices. Coach on Coast Starlight and Roomette on Sunset (LAX to SAS). It comes out at 2.8.

 

[jiml]

$35 is not an unreasonable investment if you look at it as a percentage of the payment, i.e. 2.7%. Many utility companies charge a higher percentage for paying your gas or electric bill with a credit card even though those standalone amounts are much lower than a payment including rent. The utility companies specifically want to incentivize not using credit cards, so most people would only use a credit card in an emergency and pay the fee occasionally. It might be worth trying to negotiate that monthly fee if setting up a permanent arrangement, as many do with direct bank withdrawals.

It also would be smart to check that the credit card in question treats this type of bill payment as a purchase for purpose of points accrual. Some specifically exclude that type of ongoing activity from earning points or the points are earned at a lower rate.

 

[Devil's Advocate]

I just checked one segment of a trip I already have booked at today's prices. Coach on Coast Starlight and Roomette on Sunset (LAX to SAS). It comes out at 2.8.

Would you have normally booked that segment at today's prices? If yes then 2.8 may be accurate. If not then 2.8 may be irrelevant. Right now you're saving $420 per year toward Amtrak (or anything else) by not paying this fee. That is the value you need to substantially and reliably exceed. I would also lop off a few cents per point because you're "investing" in a perpetually depreciating single-source asset.

It also would be smart to check that the credit card in question treats this type of bill payment as a purchase for purpose of points accrual. Some specifically exclude that type of ongoing activity from earning points or the points are earned at a lower rate.

Absolutely agree.

 

[allanorn]

As someone who works in the payment card/financial institution industry, the extra fees generally don't make it worthwhile economically. If you need extra points quickly, just purchase them directly. I did that when I was a few thousand short of a CS/EB/LSL trip; it was cheaper than paying rent via a credit card and the points posted within 24 hours.

It also would be smart to check that the credit card in question treats this type of bill payment as a purchase for purpose of points accrual. Some specifically exclude that type of ongoing activity from earning points or the points are earned at a lower rate.

This is very true and should be described in the cardholder agreement. Note that it may also depend on how the transaction is presented to your credit card institution, which you won't really know until you try (or call to Cardmember Services and find someone knowledgeable).

 

[TinCan782]

A few years ago I did that when I had a new HVAC installed. I didn't do any precise calculatlions but I figured the total points earned on the base amount plus the points earned on the 3% credit card surcharge was worth it.

 

[City of Miami]

When presented with similar opp to pay rent with cc last year I decided against. My realistic valuation of agr points was more like .022. That's because the higher valuation of pts is based on Value Fare when Saver Fare is very often available to us. Ergo I nearly always opt for a cash purchase and just keep accumulating points.

 

[TheVig]

I'm lucky I guess. None of my utility providers hit me a credit card surcharge fee.

 

[Dan O]

One short trip I was considering was $45 cash and more than 4500 points so that would have been a bad deal.
I wouldn't recommend it if there is any surcharge.