Pay for building a house with CC

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ZeroPoint

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hi, new guy here with probably the dumbest question(s) of the day.

I've got a citibank platinum card. I've bought a piece of land and have found a builder to build on it. It'll be built in stages, and with each stage there will need to be a payment. My credit limit would not cover the cost of each stage, but I'm thinking I can swipe, put money back in, and swipe again as required.

Has anyone tried doing this? I believe there's a credit card surcharge. Is there any way of getting around it?
 
You have found a builder that accepts credit card payment?

If there is any surcharge it would from the builder and the not the credit card provider so you would need to negotiate the surcharge with the builder. Generally if someone surcharges for credit card payments they would not be willing to drop the surcharge.

With a surcharge you are in effect buying the points and once the surcharge is >1-2% it is not really worth it but only you can answer that question. Do you really need the points that badly?
 
JohnK said:
You have found a builder that accepts credit card payment?

If there is any surcharge it would from the builder and the not the credit card provider so you would need to negotiate the surcharge with the builder. Generally if someone surcharges for credit card payments they would not be willing to drop the surcharge.

With a surcharge you are in effect buying the points and once the surcharge is >1-2% it is not really worth it but only you can answer that question. Do you really need the points that badly?
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Yeah, Masterton Homes (for those in the Sydney/NSW area) said they can.

I was under the impression Masterton just passes on the surcharge from someone else (visa?).

You are right in that I saw this as an opportunity to earn a bunch of points, but only if it's not going to cost me too much in surcharges. That's why I'm throwing it out there if there's a way to do this smartly.
 
Slightly OT, many Years ago I was working on an IT problem for a real estate firm and a US soldier cam in and "paid" for his house purchase on a US Government AMEX charge card.
 
Please be aware that if you plan on using your home loan to pay the credit card, I am quite sure no home load providers will transfer money to credit cards.

IME they will only pay the builder direct via bank transfer on builders invoice.

It wiould be worth checking first.

ejb
 
Thanks, but this will not be from a home loan but purely money saved up and currently sitting in my account.
 
ZeroPoint said:
Thanks, but this will not be from a home loan but purely money saved up and currently sitting in my account.
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Then off you go and earn a bucket load of points.

I wish I could have built paying by credit cards.:)

As long as the surcharge in not too bad it should be a good earner.

ejb
 
ZeroPoint said:
I was under the impression Masterton just passes on the surcharge from someone else (visa?).

You are right in that I saw this as an opportunity to earn a bunch of points, but only if it's not going to cost me too much in surcharges. That's why I'm throwing it out there if there's a way to do this smartly.
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All credit card companies charge businesses a fee for each transaction which is usually a flat rate negotiated by that business. Visa and Mastercard are generally cheaper than Amex or Diners Club. The business may choose to pass on the surcharge to the consumer or absorb it.

Have you asked Masterton if they have a surcharge on credit card payments? If so, then how much? You then need to work out if it is worth it for you to purchase those points or save the money.

Some people use points for business class travel or upgrades to business class and are prepared to pay ~2% surcharge to purchase the points. Personally I do not want to purchase points so try to avoid surcharges where ever possible and just rely on accumulating points through normal spending.
 
If you have the money in cash to buy a house ready to go then why not.

If there was a 2% surcharge on $300,000 that's $6,000 for say 300,000 points depending ont he card. I'd call it break even at 2%, anything less is bonus.

If you're spending that sort of money the homebuilder might be prepared to not charge you any surcharge (but of course it will be built in somewhere) if you are any good at bargining.

If you're paying in installments as people do, then you can always switch during construction if you think it may not be working for you.

Matt
 
If your credit limit isn't high enough to cover the full amount of the payment due, most banks allow you to overpay your account such that it is actually in DEBIT. You can put through a transaction of a value exceeding your credit limit, so long as that doesn't cause the net position of your account to exceed your total credit limit. $hitibank definitely do, as do NAB and ANZ - I have first hand experience of this. AMEX are the only card I have found who don't let you.
 
Builders Concerns:-

a) You can't pay.
b) They want you to fund their cashflow.

Another negotiation idea might be to offer to pay for each stage in advance (or an additional stage in advance) if they drop the CC fee for you.

This will help their cashflow while providing you with an additional ~30days of payment AND the security of knowing you can charge back if they for some reason do anything dodgy. Plus of course those wonderful points :cool:

Win-Win !
 
trippin_the_rift said:
Builders Concerns:-

a) You can't pay.
b) They want you to fund their cashflow.

Another negotiation idea might be to offer to pay for each stage in advance (or an additional stage in advance) if they drop the CC fee for you.

This will help their cashflow while providing you with an additional ~30days of payment AND the security of knowing you can charge back if they for some reason do anything dodgy. Plus of course those wonderful points :cool:

Win-Win !
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Generally paying in advance for a building is a bad idea. But with a company like Masterton it is probably a low risk bet.

I'm not sure how charge back works, I would have thought that it was offset against future payments. If the builder has low utilization of the credit facility, which coild be the case as not many people are going to buy houses on credit cards. Is there a risk that the card company will get funny about a large charge back if they know it is going to take a long period of time to recover?
 
cj0325 said:
If your credit limit isn't high enough to cover the full amount of the payment due, most banks allow you to overpay your account such that it is actually in DEBIT. You can put through a transaction of a value exceeding your credit limit, so long as that doesn't cause the net position of your account to exceed your total credit limit. $hitibank definitely do, as do NAB and ANZ - I have first hand experience of this. AMEX are the only card I have found who don't let you.
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Does anyone know if I can put my Citibank Platinum card into Debit and earn points on the extra money I put in?

I know Westpac you can... not sure about Citi.
 
Yep, you can do it with a Citibank Platinum Visa. I bought a new car on mine last June!
 
30K charge onto my card after the intial deposit and trade in of the last car.
 
Cheers. Good to know.

Next question for the board is does anyone know if Citibank actively enforces the points cap of 120,000 points for platinum members?
 
Yes, sadly, I can confirm that $hitibank actively enforces the 120K points cap.

Would be good to know of what 1:1 Visa or Mastercard is still out there with no points cap.
 
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