AOPA credit card --- WARNING.

In article Ctcqd.474453$D%.367363@attbi_s51,
"Jay Honeck" wrote:

And don't try using to reserve a hotel suite. Most debit cards (unless it's
a "dual" debit/credit card) will not work with a preauthorization -- which
is what is required to make a guaranteed reservation.

:-( Then I won't be able to make a reservation for business travel at
your hotel.

--
Bob Noel

:-( Then I won't be able to make a reservation for business travel at
your hotel.

Or anywhere else, for that matter.

I don't know of a single hotel (or even small B&B in our market) that
doesn't pre-authorize guaranteed reservations on a credit card. It's the
only way a hotel has of protecting itself against bogus reservations and
no-shows.

We can always do a "contingency" reservation without a card, but it's not
guaranteed.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

Jay Honeck wrote:

Well in my case I don't have a 'real' credit card. I have a debit visa
(work just the same). I keep most of my spendable money in checking then
use the Visa the same as cash. If I can't afford something then I don't
buy it.

It does NOT work the same.

a) Don't try renting a car.

And don't try using to reserve a hotel suite. Most debit cards (unless it's
a "dual" debit/credit card) will not work with a preauthorization -- which
is what is required to make a guaranteed reservation.

Offline debit cards (that is when cards are used without the PIN, i.e.
transactions that use the Visa or Mastercard brand network) do support
preauthorization. That's a Visa/MC requirement. When the card is charged at the
merchant, the amount of sale is preauthorized instantly. On a regular credit
card, this just instantly lowers the current available credit amount by the same
amount. But on an offline debit card is used, it puts a hold on the funds in
the bank account. That means that this amount is unavailable to withdraw, have
checks drawn on, etc. even though the money is still in the account as long as
the hold exists. This is how Visa/MC guarantees that the money will be
available when the charge posts (usually 2-3 days out).

The hold goes away when the charge posts (e.g. actual transaction amount is
charged to the account) or else it times out (1-2 weeks) if no charge actually
posts.

Sometimes a preauthorized hold is put on the card without an actual transaction
amount known yet just to make sure there will be enough funds available.
Examples are pay-at-the-gas-pump transactions (usually $50 is preauthorized
before you start pumping), restaurants where an extra amount is pre-authorized
in expectation of a tip, hotels (where they preauthorize for guaranteed
reservations to make sure the card is valid, and also when you check in to
preauthorize some amount for the expected stay and possible incidentals), rental
car places etc. Also AOPA preauthorized $1 every six months or so if you have
auto-renewal to make sure the card is active. You'll never see that $1 on your
statement because they never post the charge.

It's important to understand that just because an amount is preauthorized does
not necessarily mean that it will post to your account. However it will tie up
that amount, either in credit line for a credit card or actual bank funds for a
debit card.

That is another big disadvantage to using debit cards, especially if it causes
you to bounce checks even though there is bank physically in the account but it
is effectively locked until the hold expires.

By the way, MBNA actually shows you preauthorized charge amounts AND who is
making the charge online. Most other credit issuers do not, although you can
usually see how much is pre-authorized (held) by taking your credit limit,
subtracting known charges and balances, and observing any discrepancy between
that difference and the current available credit. (Rounded to the nearest
dollar).

An "online debit" transaction requires a PIN and uses the ATM/POS networks.
Money is debited instantly and there is no preauthorizing then posting later.

I think cards that only suport online debit (e.g. no mastercard or visa logo)
are much better since if somebody steals it they can't do squat without the
PIN. That no-fraud guarantee on MC/Visa debits is nice, but it doesn't help you
right away while your checking account's been cleaned out, your checks are
bouncing, and your card won't work. Sorry for you if you have automatic
overdraft protection from savings too.

"Janet" wrote

snip a bunch of stuff so I can bitch about somethingg

Sometimes a preauthorized hold is put on the card without an actual
transaction
amount known yet just to make sure there will be enough funds available.
Examples are pay-at-the-gas-pump transactions (usually $50 is
preauthorized
before you start pumping),

What is that all about? $50 for gas on a card? That does not even come
close for me. My full size work van has a tank that will hold 31.6 gallons
of gas, and still be running. With gas at times up to $1.89, I have to let
the pump shut off, and then have to start up another charge to finish
filling up. Let's get real here, gas station owners of America!Thanks, I
feel better now.

Required aviation content: I drove that van up to OSH this year, and it
would have been cheaper to charter a plane, after buying the gas and a new
transmission. (well, almost) :-)
--
Jim in NC

Another "we'll screw you for paying cash" item is cell phones. Just
try and buy one for cash; i.e. no contract.

You'll find you pay 3-10x per minute for the priviledge of paying
in advance. And of course, the phone is not "free" either..

{In the EU, prepay phones are both common and inexpensive..}
--
A host is a host from coast to
& no one will talk to a host that's close........[v].(301) 56-LINUX
Unless the host (that isn't close).........................pob 1433
is busy, hung or dead....................................20915-1433

Jay Honeck wrote:

One lesser known fact about credit card companies is that they will
screw the VENDOR far more readily than they will their customers.

has American Express or Diners Club done the same to you?
(just curious)

We'll never know -- I threw BOTH of them out right after we opened, after
they tried to charge us 5% for each transaction. (The other cards --
Visa, Mastercard & Discover -- charge us "only" 4% for the privilege of
"working" with them.)

Interesting. I wonder if the 5% plus following their own rules (if they
do!) might end up costing you less in the long run.

Personally, I'm a big believer in not trusting parties that don't follow
even their own rules. I always worry that the next "failure" will be
bigger than any before.

- Andrew

I've wondered that too. We put everything we buy (even my daughter's
college tuition) on our Discover (and pay it off next month, of course)
and get the cashback discount. Keep a Visa and American Express for the
few places that don't take Discover (like Costco).

I always figured that Discover charges the merchant more than Visa...
but your posting suggests otherwise.

Rich

Jay Honeck wrote:

Here's another credit card mystery: Why the hell does ANYONE use any card
but Discover? Everyone else charges to use their cards, while Discover
actually PAYS you to use their card -- yet they are a distant third or
fourth in the industry.

"Jay Honeck" wrote in message
news:Fuspd.85361$V41.50473@attbi_s52...

Here's another credit card mystery: Why the hell does ANYONE use any card
but Discover? Everyone else charges to use their cards, while Discover
actually PAYS you to use their card -- yet they are a distant third or
fourth in the industry.

Marketing is everything to American consumers, I guess...


VISA and Mastercard do not charge me for using their cards.

"Jay Honeck" wrote in message
news:Fuspd.85361$V41.50473@attbi_s52...
One lesser known fact about credit card companies is that they will
screw
the VENDOR far more readily than they will their customers.

has American Express or Diners Club done the same to you?
(just curious)

We'll never know -- I threw BOTH of them out right after we opened, after
they tried to charge us 5% for each transaction. (The other cards --
Visa, Mastercard & Discover -- charge us "only" 4% for the privilege of
"working" with them.)

Here's another credit card mystery: Why the hell does ANYONE use any card
but Discover? Everyone else charges to use their cards, while Discover
actually PAYS you to use their card -- yet they are a distant third or
fourth in the industry.


Because there are cards that give more valuable rebates than Discover. I
have an REI card that pays 1% on every purchase starting from the first
dollar.

Mike
MU-2

In article Fuspd.85361$V41.50473@attbi_s52, Jay Honeck
wrote:

Here's another credit card mystery: Why the hell does ANYONE use any card
but Discover? Everyone else charges to use their cards, while Discover
actually PAYS you to use their card -- yet they are a distant third or
fourth in the industry.

If you pay your balance off each month, you wouldn't. But if you're
carrying a balance, that changes things considerably. My Disocver
"pays me back up to" 1%, while at the same time charging me 14.99% in
interest. If I put the same purchase on my MasterCard, I'm paying 6.9%
a.p.r.

Unless I pay the Discover off almost immediately, I come out far ahead
using my lower-interest MasterCard.

Someday, if I ever actually make some money in this business, I won't
need to worry about interest rates. That day's not here yet. :-)

--
Garner R. Miller
ATP/CFII/MEI
Clifton Park, NY =USA=