ATO (tax office) payments by credit card

[georgie23]

I never factor the exchange rate - win some lose some - in the long run it will all balance out

 

[Waddygib]

I never factor the exchange rate - win some lose some - in the long run it will all balance out

Actually in the really long run you'll go broke (it's called gamblers ruin) but admittedly unlikely

 

[Duffa]

I never factor the exchange rate - win some lose some - in the long run it will all balance out

OK, I'll concede your point on the exchange rate fluctuation but AUD has trended down over the last five years so you'll generally lose.
Also, you still haven't factored in the Forex rate to pay off that US card using your AUD. That's going to be 0.7-1.0%
I suspect a lot of users of this strategy might be blinded by the inability to separate Forex fees from exchange rate fluctuation due to the timing of payment and repayment.
But, I can test it. I have a US Chase Aeroplan card which I will give a whirl.
I can't send money back onto that card from here, for less than 1%, which is why I have never used it.

 

[Waddygib]

It does very much sound like folks are getting maybe 1 or 2 extra Amex MR points per dollar for about 1-2% extra cost, a lot more work, and some currency risk.

Not to mention the fact that being "less than truthful" on an application for a financial product has its own legal risk.

Might leave this one well alone

 

[albyd]

Re the FX spread, most people generally use Wise or Revolut where the spread is maybe 20 pips.

That makes it worth the effort though it is a ‘hobby’ for many of us on AFF so there is that X factor which the raw numbers can’t take into account.

@Duffa what service are you using for your FX? 1% sounds high outside of losing on the FX itself. I tend to keep some USD in my US account to cover these types of expenses and convert money straight away when I make a big purchase so I ‘hedge’ my FX risk of sorts. That defeats the point of a ‘credit’ card as I’m not using the credit function by effectively tying up $$ before they’re due but I think there are other more important factors with using a US card like currency risk which can quickly offset any points gain.

 

[JYK]

Between AMEX deval and slain dragon, are there viable solutions remaining in this game?

 

[Waddygib]

Only if you want to cheat on you taxes

 

[kpc]

Between AMEX deval and slain dragon, are there viable solutions remaining in this game?

1. Pay.com.au assuming you can tax deduct the fee and your credit card earns enough points per $ spent.

2. GCs

 

[Waddygib]

1. Pay.com.au assuming you can tax deduct the fee and your credit card earns enough points per $ spent.

2. GCs

Pay.com.cau is promoting a tax avoidance scheme and will be shut down before long


You can't tax deduct fees if the points are for personal use. The economics doesn't stack up without this.

 

[andye]

I agree paying an inflated fee to get extra points wouldn't stand up as deductible if scrutinised.
Deducting the standard fee for the normal points is reasonable IMO as you van argue you are using a portal for convenience, cash-flow whatever
There are also some people who genuinely believe that points are worth >2c to buy so will still do so without claiming a deduction

 

[Waddygib]

ATO already are having a look at it. I doubt the "convenience" argument will stack up given it is no more convenient for paying a BPAY bill than via any other platform.

And pay.com.au is especially vulnerable because you can literally opt to pay more just to earn more points.

Not to mention it's the primary focus of their marketing.

Couple the fact that the primary beneficiaries are higher income folks as well as Australia's least popular companies (airlines) and you have an easy target for politicians.