Credit Card Fee for Tax Payments

To The Editor:

That well-worn adage, “Be careful what you wish for, because you just might get it,” never made more sense than it does this Winter tax season in .

For years, Woods residents have been asking the city mammas and poppas to let homeowners charge their semi-annual property taxes on their credit cards. Hey, using plastic is not only convenient, it saves dipping into your savings for a lump sum cash payment. And many credit card issuers have attractive “rewards” programs that offer travel and cash-back to spenders.

Until this month, the city’s response has been less than enthusiastic. I served on the Woods council for four years and the leadership’s stock answer was that servicing credit cards was either “too much trouble” or “too expensive.” Well, apparently that’s no longer the case. Both residents and business property taxpayers would be wise to heed another ancient adage: “Buyer beware.”

The good news is, the Woods now accepts credit card payments for property taxes. Sit down and I’ll tell you the bad news.

In addition to the customary one percent “Administration Fee” on each tax bill, the Woods city council has approved an additional three percent “Processing Fee,” in their words, “for this (credit card) service.” Service? Ripoff is a better word.

Pick a number. Say your Winter taxes are $3,000, which is not unreasonable in the Woods. The  one percent “Administration Fee” that even cash customers must pay is $30. For what, I have no idea. Now, add a three percent “Processing Fee” of $90 if you choose to pay by credit card and the city ends up charging you $120 --- to give them $3 grand? If your annual taxes are $6,000 the cost for this “service” is $240 a year!

Talk about Voodoo economics.

Yes, credit card companies do charge their merchants--in this case, Grosse Pointe Woods--to process their credit card payments. For huge accounts like the Woods’, however, that figure customarily is much less than three percent. And who said they have to “make money” on collections anyway? With the way the city inflates residents’ tax bills in this horrible real estate market, the Woods council ought to be happy they can offer a simple service without trying to make even more money on their taxpayers.

Pete Waldmeir

Grosse Pointe Woods