Oklahoma Tag offices and State of Oklahoam Credit Card Fees

[zstyles]

So a friend of mine called me the other day and we were talking and he mentioned that he was at the tag office and there was around a 4.00 fee for using any type of credit card for paying for anything at a tag office. I know that most CC companies frown upon any fee for using the card vs. cash.

I called a tag office and they said its a "transaction fee" for anyone using a credit card that the state of Oklahoma charges as they can't pay fee's with taxpayers money. They said if I didn't like it that I could write a check or pay with cash...

I called Visa and they said that this was against their policy and they would look into it...the tag office lady just told me to call the state if I had a problem with it.

[patric]

So a friend of mine called me the other day and we were talking and he mentioned that he was at the tag office and there was around a 4.00 fee for using any type of credit card for paying for anything at a tag office. I know that most CC companies frown upon any fee for using the card vs. cash.

I called a tag office and they said its a "transaction fee" for anyone using a credit card that the state of Oklahoma charges as they can't pay fee's with taxpayers money. They said if I didn't like it that I could write a check or pay with cash...

I called Visa and they said that this was against their policy and they would look into it...the tag office lady just told me to call the state if I had a problem with it.

I wonder if that's why they always showed favoritism towards using the Discover card?

[nathanm]

They used to only accept Discover at tag agencies, because they're the only interchange organization that hasn't had a prohibition on such fees. Amex also didn't, but they did have a clause stating that their cardholders had to get the best terms available, so if a place also accepted Visa/MC, they couldn't charge a fee on Amex, either. However, one of the things the CARD act did was make those prohibitions illegal, so now the tag agents accept Visa/MC too.

[sgrizzle]

I wonder if that's why they always showed favoritism towards using the Discover card?

As I understand it, Discover is the only one who doesn't charge a per-transaction fee. Visa and MC charged a flat rate+percentage on most transactions so if you buy a pizza with your debit card, then Joe Mommas get less money than if you pay with cash. that is why gas pumps used to charge higher for charge customers.

The state has a set rate, they need $40 for item X. $10 goes to the agent, $13 goes to this fund, $17 goes to this fund, etc. If visa keeps $1, then in effect they only collected $39 for something. It's the same as if they gave a discount, in the state's eyes.

To avoid this problem they used to just not accept Visa/MC but now that they are required to, they have to collect the processing fee up front which are likely high since they won't agree to do any large contracts or percentage deals.

P.S. They also charge an additional fee for being unable to spell "Oklahoma"

[garzaglass]

All the "why and how" they charge this fee doesn't matter when its against Visa/MC policy to do so.  Anybody who signs a contract with Visa/MC is agreeing NOT to charge any fees what so ever, so by charging this $4.00 fee they are not honoring their contract and I hope somebody stops them soon. 

[Red Arrow]

All the "why and how" they charge this fee doesn't matter when its against Visa/MC policy to do so.  Anybody who signs a contract with Visa/MC is agreeing NOT to charge any fees what so ever, so by charging this $4.00 fee they are not honoring their contract and I hope somebody stops them soon. 

The solution to this may be "no credit cards accepted".   Be careful what you wish for, you may get it.

[garzaglass]

yes and that would be their choice but if they choose to accept them they choose to accept the rules of them.

[Red Arrow]

Has anyone actually seen the contract between the State and VISA/MC?  It may be a different contract than usual.  The government has a strange ability to say if you want to do business with the government, you will do it the government way. (Kind of like the right way, the wrong way, and the Army way.)

[garzaglass]

yep, its the same contract as any other business.  The government just thinks they can do whatever they want but if enough people complain they cant. 

[sgrizzle]

Time to dismount the soap box. This is from Mastercard:

We allow a "convenience" to be charged by certain educational institutions and public sector merchants, including:
-Elementary and secondary schools for tuition and related fees, and school-maintained room and board
-Colleges, universities, professional schools, and junior colleges for tuition and related fees, and school-maintained room and board
-Local, state, and federal courts of law that administer and process court fees, alimony, and child support payments
-Government entities that administer and process local, state, and federal fines
-Local, state, and federal entities that engage in financial administration and taxation
-Government Services; merchants that provide general support services for the government

[DolfanBob]

Ok if this is the case. How bout my Visa debit card from my checking account. That is not a borrow from Visa. As far as I'm concerned why should I pay the Four Dollar fee if it's my money in my account ?
Should be the same as writing them a check. Which takes longer for them to process and get their money, and add the possibility of it being hot. It just makes no sense.
P.S. I did my tag on line for the first time this year and still had the card fee and mailing fee added on my total. They get you no matter how you play their game.

[zstyles]

Wow thanks mastercrap..why don't you just waive the fee instead of making your cardholders pay extra to use your POS card!

[sgrizzle]

Ok if this is the case. How bout my Visa debit card from my checking account. That is not a borrow from Visa. As far as I'm concerned why should I pay the Four Dollar fee if it's my money in my account ?
Should be the same as writing them a check. Which takes longer for them to process and get their money, and add the possibility of it being hot. It just makes no sense.
P.S. I did my tag on line for the first time this year and still had the card fee and mailing fee added on my total. They get you no matter how you play their game.

Visa still takes money out of the transaction. I've even read that debit cards charge more fees.

[Red Arrow]

Wow thanks mastercrap..why don't you just waive the fee instead of making your cardholders pay extra to use your POS card!

That's how they make money off of "deadbeats" like me that pay in full each month.

[nathanm]

Visa still takes money out of the transaction. I've even read that debit cards charge more fees.

The merchant fee structure generally goes like this (presuming it's a reasonably large purchase, say over $20), from large to small:

Amex > rewards cards > regular credit cards > debit cards > PINned debit/ATM

For very small transactions, the credit or non-pinned debit card is actually cheaper for the merchant because the ATM interchange charges a flat rate of 25-50c, while the credit cards charge a smaller flat fee plus a percentage of the amount. McDonald's and WalMart get special treatment and don't pay as much on any of them.

One of the big reasons the banks have been pushing rewards cards so hard in the last several years is because they're a separate category and get bigger fees, which more than offset the cost of the rewards.