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$91 "convenience fee" for paying property taxes with a credit card

December 11th, 2012 at 12:20 pm

Got my new Capitol One credit card in the mail today. I planned on using it to pay my property taxes. My property tax bill indicated there would be a convenience fee but I figured paying $3 or so would still be worth it, since I'd be earning $100 cash back from Capitol One.

I went to the website of "Official Payments" to do so and after entering my data, I learned there would be a $91 convenience fee to do so using my credit card. (A debit card is charged just $3; too bad I don't have a debit card.)

$91???? You've got to be kidding me!

I called my town clerk's office to complain about this. Perhaps they were unaware Official Payments charges such usurious fees. The town clerk was nonplussed. Why would anyone pay such an outrageous fee, I asked. Well, maybe some people have no other way to pay their property taxes than with a credit card, she said. I'm surprised the town of NXXXX would do business with a company like that, I said. Oh, a lot of the towns do business with them, she said.

Geez. I just can't believe government entities would condone this kind of charge. I have half a mind to complain to someone at the state level.

8 Responses to “$91 "convenience fee" for paying property taxes with a credit card”

  1. MonkeyMama Says:

    This is pretty standard with any government entity. The reason being that their budgets are fixed and they have no other wiggle room to pass the buck to their customer. Retailers and such just factor the merchant fees into their pricing. Governments can not do this - so charge a fee to pay by credit card. This is standard practice for *any* government payment.

    I suppose the question then becomes how much does the payment processor have to pay to the credit card company (merchant fees) and how much do they get to keep?

  2. ThriftoRama Says:

    It's the same here. They charge a 3 percent fee to pay with credit. Something about covering the fees Visa, etc. charge them to offer the service. It's pretty standard.

  3. creditcardfree Says:

    I agree with MM, this is standard with credit card payments to government entities. It is usually a percentage of the tax or payment you are making. I believe the state I live in uses the same company...Official Payments.

    Sorry the fee is so high that it won't be worth it to use for the cash back. Frown

  4. snafu Says:

    A lot of retailers won't accept AMEX because they charge as much as 4% to retailers. We should all be asking for a discount when paying cash as the 3% CC mark-up has been added to most merchandise.

    Does your town taxation system have a Tax Installment Payment Plan [TIPPS]? It's an automatic deduction from your bank account of 1/12 of your annual property tax. There is no fee here as the City is pleased to have income spread out. A lot of people escrow their property tax payment into their mortgage as a seamless payment but in many instances the mortgage company profits by adding a fee as you've discovered via Capital One.

  5. Ima saver Says:

    Our county charges a 3% fee also.

  6. Petunia 100 Says:

    Ouch! Patient Saver, will you be able to spend enough on other things to earn your $100 cash back?

    Snafu, my regular grocery store won't take American Express. Frown

  7. patientsaver Says:

    Oh, yes, i'll have no problem meeting the $500 spend target with the card. It will just take longer than the single transaction I'd envisioned....

  8. dmontngrey Says:

    Ouch. I think we have that fee here, but I never really thought about how high it would quickly get! No fee if paid from my bank account, so I just do that. It saves me having to send a check to them, so that works nicely.

    How are you feeling? Definitely draining here. I have a swollen sore throat and a slight ear ache. Ibuprofen and tea are my best friends today!!

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