B&M University Charging Fee for Paying Tuition with Credit Card

I'm an online student at University of Idaho, and the university has been in cost-cutting mode in a big way recently. Hey, I appreciate that in a way, but recently I received a letter stating that "Due to skyrocketing credit card use among students for student fees, room and board and tuition costs, the University of Idaho Student Accounts and Cashiers Office has added a 2.5 percent fee to all payments made with credit cards."

The university has added a Web Check option that will not include a fee. Incidental expenses like traffic tickets, etc. can still be paid with credit card with no fee.

As a full-time professional and a mom, I only take one class at a time. That's all the time I'm willing to make for it, but I AM plugging away. That makes me ineligible for the usual student loans (UI says I need to be in two classes to qualify), so I just pay out of pocket. Since other students are also paying out of pocket for their education (not just professionals, but especially professionals), this seems discriminatory based on source of funding. Right now, I am lucky enough to be able to pay in cash with the Web Check system, so this new rule does not affect me financially. But I may not always be in this fortunate position, and I'm sure there are other students who currently are not. I think online students are a money-maker for B&M schools, since we cause no side costs like housing, classrooms, etc., and that especialy makes me feel that we should not be penalized in this way.

Has anyone else encountered this type of fee implementation at their school?

As a side, when I paid for my winter 2005 semester class in early January, I made an online credit card payment on the evening of the due date. The next day a $50 late fee was assessed to my account (both my student account and my credit card account). I contested the fee and was told that the university automatically charges this fee after 5:00 pm on the due date, but that it was then customarily reversed for anyone who paid online after 5:00.

To me, a better way to cut costs associated with the use of credit cards would be to stop this wasteful practice. I assume the university had to pay two extra credit card fees-- once for charging my credit card, and once for crediting it.

Thoughts, anyone? Am I just being a whiner? If you think I am, my feelings won't be hurt. Much.

 

I understand the cost-cutting reasons for the move but 2.5% seems a bit outrageous. If they have a good deal on credit card processing then they could even be making money on it -- Paypal card processing goes as low as 1.9% -- and if they don't have a good deal then maybe they should get a better one!

I always pay tuition with a cashback card like Citi Dividend and then immediately pay it off, so I'm essentially getting a 1% discount (my school doesn't charge any fee).

 

I received a letter from the University of Houston stating as of the end of 2005 students will no longer be able to use a Visa card. I am not sure why, just that we cannot use it anymore. I guess they were having to pay to much in fees. Get this. I only have a Visa debit card. That is my whine of the day.

 

Debit, credit, same fees.

Many merchants are also facing this, especially those transacting small amounts (like gas stations and fast food outlets). The 3% or so really cuts into profit margins. They, like the schools, have to decide whether or not either taking away the charging privilege or passing on the fees will cost them more in lost business than it does to absorb the fees.

On a side note, I'm amazed at how many people choose "debit" with debit cards instead of "credit," even when they're not getting any cash back. I think "debit" triggers a fee to the user (on top of the fee to the merchant).

I use my debit card for almost all cash transactions now, and almost all credit card ones, too. (Exception: when the merchant needs to put a "hold" on it by blocking a large amount of cash in my account until I return the rental car or check out of my hote room. In those cases I use a regular credit card.) The convenience is terrific, and merchants are pressured by market forces to allow consumers to use the cards. Again, if they refuse, they run the risk of losing business to other merchants who will accept them.

American Express, IIRC, charges 5%, which means those cards are accepted by fewer merchants.

Finally, universities might feel empowered to pass on the fees, not fearing that students will drop out--a major life decision--over that.

 

This is somewhat off-topic, but back when I was in the MBA distance learning program at the Edinburgh Business School, I was thrilled when they decided to start accepting credit cards for payment of fees. Prior to that, they only accepted bank checks drawn in UK pounds. No credit cards, no wire transfers, no international postal money orders.

It was surprisingly difficult and expensive to find a financial institution in the Seattle area that could do this. After my bank (Bank of America) said they had not the faintest idea where to go, I had a flash of insight, called the local British Consulate, and asked their advice. They sent me to the local Thomas Cook office, where they happily cut me a check drawn on a large bank in London. I sent that to Edinburgh and all was copacetic. Thomas Cook did charge me $ 7 USD per check for this.

I find it interesting however, how many vendors are now passing on credit card surcharges to account for processing fees.

 

I am sorry. I forgot to reference this. Here it is:

From the University of Houston Financial Page:


Fee Bills for Summer Session 4 will be mailed by June 24, 2005 and will be due by July 01, 2005.
MAJOR NEWS ITEM : Beginning on, or about, December 14, 2005 there will be major changes in the acceptance of credit cards for payment of tuition and fees.
Effective December 14, 2005, the university will no longer accept VISA cards for use in paying tuition and fees. The university will only accept MasterCard and Discover card for credit card payment of tuition and fees.
Effective December 14, 2005 the university will charge a Convenience Fee for the use of credit cards as payment for tuition and fees. This Convenience Fee will be adjusted on an annual basis.


--------------------------------------------------------------------------------

 

Interesting. While you often see American Express, Discover, and Diners Club excluded, you almost always see Visa and Mastercard hand-in-hand. Odd that they would disallow Visa all together. (Unless they have an agreement with Mastercard that stipulates this arrangement--but I would think such a thing would exclude Discover, too.)

All of this "low finance" is confusing!

 

The Utah Statesman
Utah State University

Visa cards no longer an option to pay tuition

Requires free registration

http://www.utahstatesman.com/media/paper243/news/2004/03/17/CampusNews/Visa-Cards.No.Longer.An.Option.To.Pay.Tuition-634914.shtml

 

It ain't necessarily what it seems.

Not once you understand what's really going on. It has to do with the rules VISA (and not MasterCard, AMEX or Discover) imposes on the use of "convenience fees" by its merchants.

Don't be fooled. It's not about the expense of VISA card processing fees over others. In most cases it costs exactly the same to process VISA as it does MasterCard. If 65% of the university's credit card processing costs were from VISA, then all that means is that 65% of the money paid to the university by credit or debit card came from cards bearing the VISA logo. It does not (most likely) mean that VISA is costing the university more to process than it costs to process MasterCard.

The problem, I'm tellin' ya', is VISA policy with regard to "convenience fees." Period.

Well, then, let's see if I can de-mystify it a bit...

See next post...

 

Part 1 of 3

This, precisely as worded, may be a violation of the University's merchant agreement with the various credit card companies. It's complex, however, and I will explain it better as part of my further commentary below...

Which is kinda' odd since the check-clearing service providers usually charge fees that are similar to those charged by credit card companies. That said, there are some check-clearing service providers that only charge a transaction fee, but no percentage discount fee and, if so, that would help explain this university policy.

This makes sense. If a person's paying for a course that costs $600, and if the university is paying... oh... let's say a 2% discount rate (plus a fixed transaction fee) to the credit card companies/processors, then that's $12 and change (plus the monthly statement and other fees amortized across all credit card transactions for said month) that the university must pay. But if a student is paying a $15 parking ticket, it's only $.03 (plus the transaction fee)... which, apparently, the university is figuring isn't worth the trouble of inconveniencing the student over.

PayPal (which is not a true merchant account provider but is, rather, what's called a "third-party credit card processor") is the last thing against which to compare true merchant account providers... any of which can (and and usually do) easily beat PayPal's prices and provide a raft of more secure and more convenient services than does PayPal (or virtually any other third-party processor).

A university with a good financial statement should be able to get a discount rate of under 1% -- maybe even as low as .4% -- for "card-present" transactions; and from well under 2% to, typically, not alot more than 2% for "card-not-present" transactions (via the Internet or over the telephone). But the discount rate is just one of the fees which the merchant (the university, in this case) must endure. There's a flat transaction fee which can range from around a nickel or so to as much as fifty or even seventy-five cents; and then there are fixed fees for such things as monthly statements, or monthly gateway fees, etc....

...all of which expenses must be amortized across all of the merchant's credit card transactions for said month in order for the true cost of accepting credit cards to be known. If the merchant accepts very few credit cards in a given month, then those other fixed costs, as a percentage of each transaction, can be relatively high.

That may be it; however, traditionally it's MasterCard that tends to charge the merchant more (than does VISA) for the privilege of accepting debit cards bearing its logo. So, though it's possible that you're right, I doubt that it's because VISA is charging higher fees. Instead, I suspect it's because of VISA's somewhat more restrictive rules with regard precisely what is the subject of this thread: A merchant's right/ability to charge the cardholder some kind of "convenience fee" to cover VISA's processing charges.

Then you may need another debit card bearing the MasterCard logo.

Debit cards bearing the VISA or MasterCard logo can be obtained in two ways:

1. From one's bank as the VISA- or MasterCard-logoed ATM/Check-card/debit-card that is hooked to one's checking acount (the most common and least-expensive way); and,
   
2. Directly from a pre-paid VISA and/or MasterCard debit card provider (which may or may not also offer full-fledged VISA or MasterCard credit cards) which offers debit card accounts that are not also regular bank checking accounts in the classic sense; but which may offer some pseudo-bank/pseudo-checking-account features for a fee.[/list=1]The latter method is often the sort of thing that only someone with lousy credit, or who couldn't open a bona fide checking account with a regular bank (i.e., what the debit card industry calls "the unbanked" or "the underbanked") would be forced to do in order to have a card in their wallet that bears the VISA or MasterCard logo; which they can use, in many ways and cases, almost exactly like a bank-issued, checking-account-affiliated ATM/Check-card/debit-card; which may even offer the ability to issue paper checks (typically via an online web interface); and into which one's payroll may even be direct-deposited (often for free), just like a checking account...
   
   ...making such a debit card product almost like a pseudo checking account which the unbanked and/or underbanked my use instead of an actual checking account for only marginally more overall cost.
   
   But it's quickly becoming something that is attractive to more than just the underbanked or unbanked. Industry trend analysis reports show that people with perfectly fine credit, and who can easily get a regular checking account at any bank (and, therefore, who can easily get a free, VISA- or MasterCard-logoed ATM/Check-card/Debit-card affiliated therewith) are finding these non-bank-affiliated, pre-paid debit cards (the ones in the latter category, above) to be convenient ways to manage expenses associated with business travel or small home/office (SOHO) businesses; or to make online purchases without risking having to key-in to merchant web sites their actual credit card and/or bank-issued/checking-account-associated ATM/Check-card numbers. The costs of using such aftermarket debit cards are now getting low enough that those who have experienced credit card and/or ATM/Check-card fraud sometimes find them well worth the small costs of ownership/use in order to keep the fraudsters out of the credit/debit/ATM/check-card accounts that really matter.
   
   Though I, for example, have checking accounts (both business and personal), each of which provide either or both of a VISA- and/or MasterCard-logoed ATM/Check-card; and though I have several actual credit cards bearing VISA, MasterCard and American Express logos (but not Discover... I hate discover), I also have a few different VISA- or a MasterCard-logoed, pre-paid debit cards which I use to both better keep track of expenditures associated with certain projects and/or clients, as well as to present in situations where I'm concerned about fraudsters getting hold of my other card numbers; and which can also be useful as a means of covering employee expenses without making the employee pay first and then submit a reimbursement request. The costs, as a percentage of the funds that I run through those accounts, are minimal... and the convenience can be well worth the expense.
   
   I have done alot of research on such cards because of the consulting I've done to quick-serve restaurant franchisees who are experimenting with self-branded, VISA- and/or MasterCard-logoed, pre-paid debit cards as a way to pay (via direct deposit) their unbanked/underbanked employees; and/or VISA- and/or MasterCard-logoed gift cards for use as promotional and customer retention tools.
   
   So, trust me when I tell you that, shop around all you want but, when the shopping-around dust settles, the two best (in terms of costs and convenience, all things considered) VISA- or MasterCard-logoed pre-paid debit cards (and pseudo-checking account products) out there are:
   • The Wired Plastic brand pre-paid VISA debit card; and,
     
   • The First Vineyard brand pre-paid MasterCard debit card.
   There are certainly others... like, for example, the ones shown here, just to name a few (and with none of which I'm affiliated in any way, I should add). And I'm in no way connected with -- or benefit from anyone's use of -- the card products that I've recommended, above, either. I'm simply saying that my research reveals that, feature for feature, fee for fee, and pound for pound, either the Wired Plastic VISA or the First Vineyard MasterCard are pretty much "best-of-breed." Both are products of BankFirst and One Global Finance (and its Galileo Processing unit)... which organizations I've come to trust.
   
   There's a one-time initial signup fee that varies depending on the card (but which ranges from around $10 to $40); then a flat fee of around $4 to $7 charged to the card each month for as long as one owns said card and keeps its debit account open...
   
   Continued in next post...

 

Part 2 of 3

...continued from previous post.

...but there's no fee to use either card to make purchases, or to load (fund) them through payroll direct deposit, or via ACH transfer from a bank account; and both cards offer a nice "bill pay" feature (similar to what many banks offer) wherein one may, for about a buck, login to their debit card account web interface, specify the party (and his/her address) to which one would like to "write a check," specify the amount, and then just click on a button and, voila!, anywhere from a few minutes to not more than a few hours later an actual paper check is printed from a laser printer using appropriate MICR magnetic toner (and which bears one's name in the upper-left corner, just like any regular check would), is put into an envelope by a clerk at the debit card provider's offices, and it is deposited into the US Mail on your behalf. A couple days later the intended payee receives said paper check just the same as if you had written it yourself by hand, put same into an envelope, stamped it, and sent it out in the US Mail as you've always done.

And one can easily move funds back and forth between it and one's regular checking account via ACH (usually for free) or wire transfer (for a fee)... among many other features.

If one has only a VISA (or only a MasterCard, as appropriate) as a checking-account-affiliated ATM/Check-card/Debit-card from one's bank, then one can obtain, in addition, whichever one of the two pre-paid debit cards I've suggested above to round-out what's in one's wallet so that one will have a choice between VISA and MasterCard whenever it's necessary.

• WARNING: Such cards are usually a little more costly to use than checking-account-affiliated ATM/Check-card/Debit-cards. When shopping for pre-paid debit cards be aware that some charge huge signup, annual, and/or monthly fees; and/or charge for every little thing and will, therefore, nickel-and-dime one to death. Those who provide such costly cards are opportunists who trade on the backs of those underbanked and/or unbanked who are desperate to have VISA- and/or MasterCard-logoed cards in their wallets, but who can't because of credit problems or because they're in the national database of persons who have had checking accounts closed due to overdraft or outright fraud. While the two pre-paid cards I've suggested, above, certainly cater to that market as well, at least their issuer isn't trying to capitalize on anyone's misfortune and, therefore, charges all of its customers the same relatively low and reasonable fees.

Indeed. This has always been the lament of low-margin vendors/merchants who, nevertheless, wish to offer their customers the convenience of paying by some form of plastic. Typically, however, only merchants with credit problems themselves (or with weak financial statements) would ever have to pay discount rates as high as 3% -- especially for "card present" transactions. If the merchant can physically hold the card in his/her hand, verify that the name imprinted thereon is the same as the name on the cardholder's driver's license, and can then swipe it himself through the terminal (i.e., what's called a "card-present" transaction), then discount rates of around 1.2% to maybe 1.7% are possible even for merchants with marginal credit or a not-so-terrific financial statement; and sometimes well under 1% for those in a better financial situation.

It's the "card-not-present" transactions that cost the merchant more in terms of both discount rates and transaction fees -- sometimes even more than 3% (though that would be uncommon unless the merchant's in a high-risk business, or has marginal or downright poor financials and/or credit). Purchases over the web are examples of "card-not-present" transactions; and it is those kinds of transactions -- and the fraud derived therefrom -- that has screwed-up the whole credit card acceptance business for everyone! For many (most, actually) online merchants, chargebacks (sometimes due to abuse by legitimate cardholders, but usually because of fraudulent transactions using stolen credit cards) are the bane of their existence; and the problem is driving-up credit card acceptance costs for everyone... including universities.

And schools -- both non-profit and for-profit -- that are seriously mindful of how they market themselves, and whether they're making it as convenient as possible for their students, think long and hard about such things. The Office of the President of the University of California, for example, has drafted a six-page policy on this very issue which explains to the university's various departments how (or even whether) credit card processing fees should be passed-on to students in the form of "convenience fees." Said six-page policy clearly spells out the sometimes rigid credit card company rules regarding such things; warns of not falling afoul of them; requires that such fees be reasonable and imposed only when absolutely necessary, and so on and so forth.

You are correct... at least most of the time. It just depends on the card and its issuer. Debit cards -- pretty much no matter what kind -- which bear the VISA or MasterCard logo may usually be used for free for (i.e., no transaction fee to) the cardholder at the point of sale when they're used like a credit card (i.e., what's called a "signature transaction" when in a "card present" situation); but charge a small fee to the cardholder when used as an ATM/Debit card (i.e., what's called a "PIN transaction" when in a "card present" situation). But some debit card providers charage a fee either way. It just depends.

Certainly, for those whose debit card provider charges no fee in "card present" transactions at the point-of-sale when said card is used like a credit card, it makes no sense at all to use said card like an ATM/Debit card (i.e., selecting "Debit" and then keying-in a PIN number). Using most debit cards as a "credit" card is usually free; and using them as a true debit card (in an ATM-like manner) usually has a fee associated with it.

Card-not-present transactions (over the Internet, for example... or by telephone) using VISA- or MasterCard-logoed cards are nearly always treated as "creidt card" type transactions even if the card being used is a "debit" card. Such transactions are, therefore, usually free to the cardholder... but, again, it just depends on the card, who issued it, and what are its policies.

And, by the way, the foregoing is only true of VISA- or MasterCard-logoed debit cards. Debit cards that are only debit cards (which do not bear either the VISA or MasterCard logo, but which bear the Cirrus or some other ATM system's logo) are always treated like debit/ATM cards which require the entry of a PIN number and, therefore, usually have a small cardholder fee associated with their use. Such cards may usually not be used over the Internet or the telephone and are limited to "card-present" transactions only.

Also, just so it will be clear to the reader, the transaction fees that are typically assessed to the cardholder when said cardholder uses his/her debit card as an ATM/Debit card (as opposed to a "credit" card) at the point of sale are usually in addition to, and have nothing whatsoever to do with, the "convenience fees" charged by the merchant, and that are the subject of this thread.

Many people are now doing exactly what you just described. These days, I, too, carry somewhat less cash in my pocket than I used to; and use either the ATM/Check-card/Debit-card associated with my checking account, or one of the VISA- or MasterCard-logoed prepaid debit cards that I now have. Which one I use just depends on the situation and/or how I'm trying to account for the transaction for myself, or for the IRS, or for one of my clients, etc.

I also find the pre-paid VISA- or Master-Card-logoed cards useful as a way to cover the expenses of an employee who travels or who must incur reimburseable expenses on my behalf in the regular course of working for me.

Continued in next post...

 

Part 3 of 3

...continued from previous post.

I simply issue them a pre-paid VISA- or MasterCard-logoed card (sometimes, but rarely, both) with their name imprinted thereon. I am the only one who can login to the web-based card account; and I configure it to email me whenever there's any kind of activity on the card so that I know whenever the employee uses it, for what, where, and in what amount. Said email notifications also include a "low balance" warning so I can replenish the card when needed; and said email notifications also help protect me from their trying to empty the account and disappear. If it becomes clear that that's what's happening I can, in just seconds, log in, transfer the card's balance back to my checking account and then cancel said card. As long as I can catch the theft on the same day it happens (which the notification emails help me do), then the card's daily ATM withdrawal limits would keep my loss below $500 or so if that's the rip-off method the employee chose; and the card's $2,500-per-day transaction limit would limit my loss to no more than that amount in the event that the employee tried to rip me off via a purchase; and the relatively inexpensive, paid-annually bond that I take out on all employees easily covers the actual amount of the loss as long as I can show it was a true employee theft/dishonesty situation... which, of course, I could.

That's a bit high... quite high, actually. Like the VISA or MasterCard processors, the rates to process AMEX and Discover vary widely from processor to processor... but would rarely be as high as 5%. That said, it does cost a bit more to accept either AMEX and Discover, in addition to VISA and MasterCard.

But they must be very careful. Credit card company policies on doing that are very specific and sometimes rigid. Both VISA and MasterCard discourage the practice... and flat-out prohibit it altogether except under very specific circumstances. The same has always been -- and remains -- true about vendors discounting their prices for those who pay cash. Such things are against VISA and MasterCard policy, generally... except in very specific circumstances.

Government and universities have been, for a little while now, two of said "circumstances"; and have been, for a little while now, allowed to charge "convenience fees" (in order to pass-on to the cardholder the card processing fees) for such things as license fees, tax payments, or college tuition. But many governmental agencies and universities have not carefully read their merchant agreements which govern such things and are, therefore, doing it wrong. The precise wording of the University of Idaho policy (quoted in the earlier post by katheroni) smacks of something written by someone who's heard that universities can get away with it, but who hasn't really read precisely what they're allowed to do (and how they're allowed to do it) pursuant to their merchant agreement with VISA and/or MasterCard (or AMEX or Discover, for that matter, as well).

Again, this may be because their VISA processor is charging them a higher discount rate and transaction fee than is its MasterCard/Discover processor(s); but it's more likely to be because VISA is the most rigid and restrictive about how -- or even if -- "convenience fees" may be charged.

Ah... there it is... the reason they'll no longer be accepting VISA: The "...will be adjusted..." phrase.

VISA both disallows variable/adjustable "convenience fees," and also requires that all such fees be uniform across all card and transaction types. MasterCard, AMEX and Discover do not have such restrictions. So there you have it: VISA's policy, and not how much it's charging, is almost certainly the reason why University of Houston will no longer accept VISA.

So, if one wants to continue to pay them via credit card, then one with only a VISA-logoed card in his/her wallet will be forced to obtain a MasterCard-logoed card -- be it a true credit card or a pre-paid debit card -- as well.

Some (darned few, I should point out... but at least some) banks offer checking-account-affiliated ATM/Check-card/Debit-cards bearing either logo, at the customer's option. Some even issue one of each (which usually must be specially requested) so that the customer will always have a choice between VISA and MasterCard whenever one is required...

...such as the University of Houston will soon be requiring its students to make!

One should also keep in mind that University of Houston may (and I stress the word "may") be playing a variation on the now (in)famous "Wal*Mart bluff" gamibt with VISA. Wal*Mart, a couple or three years ago, announced to the press (and placed signs on its doors and at the registers saying) that it would no longer be accepting MasterCard-logoed debit cards. It was clear in its press release and signage that it would accept MasterCard-logoed credit cards; as well as VISA-logoed credit and debit cards (and AMEX and Discover)... but not MasterCard-logoed "debit" cards. Wal*Mart cited the higher fees it was being charged by MasterCard and its debit card processor .

This, of course, angered Wal*Mart customers, many of whom called/wrote-to both Wal*Mart and MasterCard to complain (the latter of which Wal*Mart was counting on, of course). Many of those customers, frankly, fell into the aforementioned "underbanked" or "unbanked" category. Such persons, therefore, only had a debit card in their wallets, and had no VISA-logoed debit or credit card (or even a MasterCard-logoed credit card) to use instead of their MasterCard-logoed debit card.

Additionally, VISA, in those days, was behind the curve in the issuance of non-bank-checking-account-affliated, VISA-logoed, pre-paid debit cards to the underbankd/unbanked. At that time (and, to some degree, still), MasterCard pretty much owned(owns) that market and, therefore, the vast majority of debit cards floating around out there which were(are) not issued by banks as ATM/Check-card/Debit-cards affiliated with real checking accounts bore(bear) the MasterCard (and not the VISA) logo. The affected group, therefore, represented a huge part of Wal*Mart's business... but, more importantly to Wal*Mart, MasterCard's, as well.

Wal*Mart made sure MasterCard understood just how much money it (MasterCard) would lose in transaction fees alone because of the huge decrease in MasterCard-logoed debit card transactions at the world's Wal*Marts. Wal*Mart also pointed-out to MasterCard the other large retailers that it (Wal*Mart) just happened to know were also ticked-off at MasterCard because of the higher debit card processing fees; and which other retailers were, therefore, interested in following Wal*Mart's lead by suspending or even cancelling their acceptance of MasterCard-logoed debit cards (though none ever did). MasterCard then took a giant step back, did the math, and quickly folded. Wal*Mart then issued a new press release and tore down its signage and all was right with the world again.

There was also a big lawsuit regarding this (and other) issue(s) *(but not one that involved Wal*Mart) which I won't get into here; but suffice it to say that between the Wal*Mart matter, and the lawsuit, the business of credit/debit card processors charging very much more (or more at all) for debit card transactions than it charges for for credit card transactions came to an abrupt end.

However, differences in what VISA processors charge versus what MasterCard processors charge can (and do) still exist... and though I seriously doubt that University of Houston is playing some kind of variation on the "Wal*Mart bluff" against VISA in order to get it to lower its processing fees, it might be... in which case it may, in time, begin accepting VISA again (that is, if the bluff works).

At any rate, assuming it won't, then those who wish to pay it by credit card will need a MasterCard-logoed product (either a credit or debit card) with which to do so. For those whose banks offer no choices, then obtaining a pre-paid debit card (such as one of the ones I've suggested, above) bearing whichever logo is not already on one's bank-issued, checking-account-affiliated ATM/Check-card/Debit-card may be necessary in order to "round-out" one's wallet and, therfore, provide one with choices when they're necessary.

For an eye-opening example of both how universities are viewing this situation, as well as how the credit card companies impose limitations on "convenience fees" and other similar tactics, the reader may view the aforementioned six-page policy document (as a PDF file) from the University of California's Office of the President.

Hope that helps!

 

A very informative and interesting post, thanks...

William

 

Thanks

I must concur that this post is interesting and informative. Thank you for the wealth of information, Gregg, and everyone else's contributions. I read the PDF from UC, and I agree that UI is probably violating the rules of their agreement with Visa.

It seems this practice of charging fees is becoming more common. Sigh ..

 

Glad I could help

Sigh, indeed! It's very frustrating... and is exactly the opposite of what both VISA and MasterCard (and AMEX and Discover) wishes were happening. They capitulated after the IRS began assessing "convenience fees" to cover its credit card processing costs. VISA, MasterCard, AMEX and Discover felt in no position to argue with the IRS. Other government agencies soon followed... and then universities.

The credit card companies have done their level best to control it by issuing policies which regulate it... some of which are working, but many of which are not. VISA is holding the line most vigorously, but I figure it's only a matter of time before its policies regarding "convenience fees" are similar to those of MasterCard and the others.

The pressure on the credit card companies, generally, is great. As private businesses learn of the "convenience fees" being charged by government agencies and universities; and has they learn of the policies which allow it, there have been huge complaints from those who lost their rights to accept credit cards in the past because they did the other thing that credit card companies prohibit: Offering discounts for cash (which is roughly the same thing, only coming at it from a different angle, as charging "convenience fees").

A possible solution for students:

• If one insists on using a credit card (and I mean a true credit card, and not a debit card) bearing the VISA logo, one need only obtain the kind of VISA card that has an online "bill pay" feature; or which issues a book of checks or drafts that can be filled-out and issued like regular checks. The university will almost certainly accept checks, no matter what. Either method (an online "bill pay" check, or a handwritten check/draft from a checkbook) would cause funds to be charged to the VISA card account in exactly the same manner, internally, as would have been the case had the university accepted the card, itself, in payment.

If, on the other hand, one insists on using a VISA-logoed debit card... well, then, that's another issue. If it's a bank-issued/ATM/Check-card-type debit card that's associated with a checking account, then one could simply write a check instead of using the card since it's all coming from the same place. And if it's one of the two cards I recommended, above (either the Wired Plastic or the First Vineyard cards), that one wants to use, they also have an online "bill pay" type feature that allows one to simply cut a check to the university via a web interface.

Personally, I think the situation will change in time. VISA has to know that its restrictive "convenience fee" policies are costing it business; and that all of its competitors have relaxed their policies so that government agencies and universities will not stop accepting their logoed products. I think VISA will eventually loosen-up its policies so they're more like the others... and this problem of a university not even accepting VISA will go away.

But that still leaves the student having to pay "convenience fees" in the first place. Such fees effectively raise their tuition by the amount of the fee -- usually in the 2% to 3% range. For students who are scrimping to keep a roof over their heads while they're going to school, every penny counts; and that 2% ty 3% can really make a difference. In such cases, it might make more sense for the student to figure out another way to get the money from the credit card and into the hands of the university... such as, as I recommended above, issuing a check or draft from the card account via either an online "bill pay" feature, or hand-writing a check or draft. There's usually a fee associated with doing that, too... but it's a heck of a lot less than 2% or 3%. In fact, it's often only a dollar to maybe four dollars at the most... that is, if there's even a fee at all. Again, it just depends on the card issuer.

 

I'd be inclined to make the bursars office count 6000 $1 bills

In fact, I think I may do just that....

And since Time Warner Cable is now charging me $3 a month to pay with my card -- I think I'll go pay my next cable bill with $130 in dimes.

WHEEEEEE!

I was once told by a convencience store cashier that they didn't take rolled coins. So I unrolled them and let her count them on the counter. Sometimes, it's best not to cooperate with the stupid and/or greedy people.

Maybe it's time for a protest campaign -- pay everyone who charges a surcharge with cash -- the most inconvenient cash you can find... And tell them why you're doing that with "wouldn't accepting my credit card cost you less time and money?"

 

Oh... so it's justice you want. We weren't even talkin' about justice. That's a whole 'nuther issue, altogether.

I have to admit, Coach, your kind of thinking on this matter really appeals to me. I've been known to do such things!