Has anyone paid for a tractor with a credit card?

[msim]

I've got a credit card with a $28,000 limit and 1.5% cash back. I'm thinking of paying cash for a new BX2380 and if I could put it on my credit card that'd be great. Not sure what the typical Kubota dealer's view of this is however. Has anyone paid for their new tractor purchase with a credit card? Was the price the same or did the dealer put a transaction fee on top of it? I'm in the Northeast (upstate NY).

Mark

 

[SidecarFlip]

Did a down payment on a used M9 with a credit card and bought my off lease Ford entirely on a credit card.

In both cases, the dealers added the portal fee to the purchase price. The customary portal fee is usually 3.5%

So you get 1.5% cash back but pay an additional 3.5% up front, in my book that makes no sense financially..

Only reason I did it was I was adverse to carrying that much cash and my intent was to pay the debt on the first payment, which I did to not incur finance charges.

Last time I checked, Kubota still had 0 percent financing. Much better deal.

In my case neither the tractor or the car qualified. Tractor came from a JD Dealer, car came from a Ford dealer but Ford has never offered 0 percent on off lease vehicles.

 

[SDT]

I've got a credit card with a $28,000 limit and 1.5% cash back. I'm thinking of paying cash for a new BX2380 and if I could put it on my credit card that'd be great. Not sure what the typical Kubota dealer's view of this is however. Has anyone paid for their new tractor purchase with a credit card? Was the price the same or did the dealer put a transaction fee on top of it? I'm in the Northeast (upstate NY).

Mark

I would be surprised (astonished) if any dealer would allow you to do so due to the service charge paid by the selling dealer.

SDT

 

[Nicfin36]

I would be surprised (astonished) if any dealer would allow you to do so due to the service charge paid by the selling dealer.

SDT

He may be able to negotiate a bit lower price paying by another means instead of a credit card, since using one would cost them money.

 

[Stmar]

I do not like to carry debt so when I got my B I asked about paying cash vs 0% financing, the difference was only $400. $30K invested generates much more than that over 60 months even in a mediocre fund. I did not ask about credit card but did when I bought a car and they did not want to do it, we did not get to the point of what the transaction fee would have been.

 

[bx tractorjoe]

Why when kubota has 0% interest would you pay the 1.5 % interest.. that's about 2500 in intrest..

There is also a 2 or 3 % charge usually but I've never done it

 

[michigander]

my dealer asks wants 4% more for transaction

 

[greg86z28]

I paid for $10,000 of my machine with credit card.

Without question ask what the maximum is that you can put on your card. We have 2% cashback. For me that was $200 in return. I also am going to see if they let me buy the backhoe with credit card.

 

[GeoHorn]

Ever heard the phrase “What the market will bear”...???

Credit cards were introduced to create customer loyalty. (Think Diner’s Club and Amex)
Store-cards (remember “Address-O-Graph”?) did the same thing but added “easy-payment” options (credit) for loyal customers (which furthered the customer-loyalty concept, as did point-of-purchase warranties.)
In the early ‘70s a new concept was created with Master-Charge (predecessor to MasterCard) which gave retailers increased-sales because customers had an easy-finance option that did not affect the individual retailer’s reserves. They charged the retailer a half-percent for that privilege.
When Master-Charge faced competition from Visa they changed names and policy toward a transaction-fee for customers who did NOT select the easy-finance option. This eventually became the standard for EVERY card-use-transaction regardless of customer intent (credit or full-payment.)
Eventually retailers realized they could increase certain sales if they offered a discount-incentive for cash customers... then those cash-customers came to realize that carrying cash was inconvenient and largely came to use cards for EVERY purchase. So retailers began to introduce transaction-fees passed on to the customer.
NOW...due to the pandemic.... many retailers refuse cash and accept ONLY cards... A double-whammy for the customer who may have to pay a subscription-fee for the card, as well as an annual fee and a finance fee along with that transaction-fee..... all quite hidden in many purchasing events.
It has become the norm.... whatever the market will bear.

I refuse to pay transaction fees. I have found that many retailers will back-down in order to make the sale if I insist. I point out that I can buy the same item on-line, similar price, ”free shipping” without paying a transaction fee. It has worked in every instance but one... the gun store.... who will charge the ATF-transaction anyway for no out-of-pocket expense to them.

 

[PaulL]

Like some other businesses (phone companies anyone?) the general business model of card companies is to hide the costs and shout the benefits. So they charge the retailers a lot for being allowed to use the card (which traditionally you didn't see), and then give you a cash rebate that makes you feel like you're getting a good deal. So the shop is often paying 2-4% depending on what deal they got from the cards people. The 1.5% cash back comes straight out of that.

So, there are two ways this could work:
1. The retailer is absorbing that 2-4% cost. In which case they have room to give you a 2-4% cash discount, unless they're the sort of retailer that really doesn't like dealing with cash
2. The retailer is passing on that 2-4% cost as a transaction fee to you. In which case it'd be 2-4% cheaper for you if you use real cash.

If you negotiated the dealer down on the fee, ultimately that's just another flavour of discount. In theory at least you could have negotiated them down the same amount on a cash deal (i.e another 2-4% lower), because their actual profit is the same in either instance.

In NZ, as with most countries in the world (potentially every country other than the US?) we can do a cards transaction with a debit card (no credit card processing fees and no carrying around cash), or do a direct and immediate transfer into the dealer's bank account using your banks phone app. The size and fragmentation of the US banking market has meant it's too hard to align all the banks on a common payment gateway, so the USA is still a big cheque using country - I haven't had a chequebook for 15 years, my US-based friends still pay bills with them.

 

[GeoHorn]

In NZ, as with most countries in the world (potentially every country other than the US?) we can do a cards transaction with a debit card (no credit card processing fees and no carrying around cash), or do a direct and immediate transfer into the dealer's bank account using your banks phone app. The size and fragmentation of the US banking market has meant it's too hard to align all the banks on a common payment gateway, so the USA is still a big cheque using country - I haven't had a chequebook for 15 years, my US-based friends still pay bills with them.

Debit cards are common here in the U.S. and virtually all retailers accept them same as cash.

The majority of purchases made by my family on are a credit card because of the 1-1/2% “cash-back” .... and the example you use, Paul, is not applicable in those cases because the price is the same... nodiscount for cash is possible at fuel pumps, grocery, online purchases.... etc etc. In addition, the CC use provides excellent book-keeping advantages in many cases. I use one particular card for personal use...a different card for professional expenses, etc . This makes my end-of-year accounting simpler. It’s also safer.... Stealing my cards is a no-loss situation for me, and often mfr’s warranties are extended automatically, and in some cases where little or no warranty was available, the card provides one or makes returns of defective purchases possible that would not be otherwise.

 

[PaulL]

All very true GeoHorn. I use a credit card for all my work expenses for exactly that reason - it costs me more but the ease of accounting is worth 1-2% for me. Similarly, as you say many retailers don't discount for cash, so why not use a credit card in that situation.

When I used to have an Amex and a Visa, and typically Visa charged lower merchant fees, I used to ask for a cash discount. If they said no and were polite they got the Visa, if they said no and were rude they got the Amex.

The reality is that the cost of those warranties, cash backs and everything else is worked into the offer. Someone pays that cost - either you directly through a transaction surcharge, or it's spread across all buyers (credit and non-credit) for retailers that don't discount for cash/debit. Eventually this model must die - if I want to buy something and have cash, surely I'd go to the retailer that discounts for cash. This must be particularly true online - one online retailer is much like another. If one retailer starts discounting cash, then they'll get all the cash buyers. That will make the retailer who doesn't discount for cash more expensive, since their buyers are now 100% credit card. Having said that, it's been going on for 15-20 years and hasn't changed, so "eventually" may be a long time in the future.

 

[BigG]

Why not buy the tractor with the 0% from Kubota and then make the payments on the credit card? You just get your money back a little at a time.

 

[Fordtech86]

Why not buy the tractor with the 0% from Kubota and then make the payments on the credit card? You just get your money back a little at a time.

Its been over a year so I don’t recall for sure, but I financed the backhoe for the 2 yr 0% implement offer through kubota credit. When you set up the account I believe the only option is to link a bank account to it.

This is me doing it all online though too. Not sure if you can call and make payments with a card. Not saying this is the OP problem, but I could see where paying a loan like that could get a customer in a bad spot in a hurry. You got a loan at maybe 0% in best case, maybe 4-5%, whatever it is, you make that payment with your credit card, credit card bill due and you don’t have the money or say it can wait another month, so your credit card is another 25-30% interest on that payment?

Im not 100% sure but I think they don’t accept credit card payments on loans like that for that reason.

 

[BigG]

Somehow if you have a $28,000 credit card I do not think you carry a balance on the card. I run my business on a credit card just for the money back feature. I never pay to use the card. It is paid off every month. The help with the record keeping is nice also. I am sure that you could pay the loan off on line in this day and age and use the card but I do not know for sure.

 

[Fordtech86]

Somehow if you have a $28,000 credit card I do not think you carry a balance on the card. I run my business on a credit card just for the money back feature. I never pay to use the card. It is paid off every month. The help with the record keeping is nice also. I am sure that you could pay the loan off on line in this day and age and use the card but I do not know for sure.

But the lenders don’t know your situation or the OPs situation from the next guy that can’t manage their money. And just my personal experience is that I can’t pay a loan/ credit account with another credit account like a credit card. Not trying to argue with you about it, would be worth asking for the OP if he wants to try that route.

I don’t have to worry bout a credit card limit that high or a business credit card account but just being in a similar business as tractors I can see where it can go bad with people paying with a credit card. Lenders protecting stupid people from doing stupid things (and Im not implying that you or the OP are that person)

 

[Fordtech86]

And here is another example from the auto business. My sister and her husband are very well off, went to buy two brand new vehicles last year. They got my employee discount and they wanted to pay cash on top of that. They ended up coming out ahead by financing the cars for a long term with an interest rate (3-4 % I think?). They then made 3 months worth of payments on those loans then paid them off. The dealer gets their money and spiff from the finance company within that time and everybody is happy. Tractor world may be different but paying cash in the auto world isn’t where you will get the best deal

 

[Oliver]

Why not forget the CC and just write a check (or take in a bag of bills) and take advantage of the best price from the dealer?

 

[mikester]

I would be very surprised to find any dealer willing to let you put the full amount on a CC. Typically vendors get dinged 2-4% on all charges depending on card type. Generally speaking I find most dealers will only let you put $1-5K on the CC...that includes car dealerships.

 

[GreensvilleJay]

Legally ALL merchants MUST accept whatever you want to put on the credit card up to the 'available limit'. End of discussion.
If you have 28K available, you can buy the tractor with the credit card. The dealer(the 'merchant') CANNOT refuse you. If they say, 'sorry we only allow a max of $xxxx', then call the 1-800 CC number, explain you want to use their card and hand the phone over to the dealer. They'll have 2 options. 1) agree to the full use of the credit card or 2) be removed as a merchant(user) of that credit card. There's no way they like #1 but #2 is NOT an option they'll want to do. NO company could run a business without Visa or MC ability these days !
yes, I put a company to the 'test' one day and boy were they pizzed off as back then their 'merchant fee' ( what VISA charged them was 5.5%.
Now if you want to have fun, find out what their 'merchant rate' is ( easy, every CC company posts it..), let's say it works out to a merchant fee of $3200. When the dealer whines, say fine, take $3000 off the btm line price...If he keeps whining, use the card for the full amount.