michael, ... One last thing about credit cards and the concept of "buying."
I consider that you buy SPs when you give Starwood money or something of demonstrable worth and you get back SPs. As I stated, you can have an effective cost if you trade your annual MFs paid at a place like Lagunamar of around 1.6 cents per SP.
I think you should consider that there is a reason a lot of vendors don't accept American Express cards for a credit card transaction. That's because AmEx charges higher fees for the transaction than Visa or Mastercard. http://www.fivecentnickel.com/2009/07/03/credit-card-processing-fees/
If AmEx (or anyone else) charges 3% on the transaction, it gets 3% off the top (without counting renewal fees, interest or late payment fees). In effect, you give AmEX 3% of the purchase price and you get SPs equal to a cost of 3 cents (not 1 cent) per dollar of transaction processed. (The actual numbers are a lot more complicated. Westin 5 Star can run you through it. He says he owns a processing company.)
And, if you don't think the prices of the vendor for the goods and services are increased to cover the processing fees, you are sadly mistaken. The vendor does not eat the fee with a decreased profit margin. It's passed on to you through a higher price.
There is no free lunch and, any way you look at it, you are paying something to Amex for those SPs. And, it's a lot more than 1 cent per SP. (Why would AmEx be so generous with the SPs if it was losing money by doing so?)
http://truecostofcredit.com/372542 Salty
I consider that you buy SPs when you give Starwood money or something of demonstrable worth and you get back SPs. As I stated, you can have an effective cost if you trade your annual MFs paid at a place like Lagunamar of around 1.6 cents per SP.
I think you should consider that there is a reason a lot of vendors don't accept American Express cards for a credit card transaction. That's because AmEx charges higher fees for the transaction than Visa or Mastercard. http://www.fivecentnickel.com/2009/07/03/credit-card-processing-fees/
If AmEx (or anyone else) charges 3% on the transaction, it gets 3% off the top (without counting renewal fees, interest or late payment fees). In effect, you give AmEX 3% of the purchase price and you get SPs equal to a cost of 3 cents (not 1 cent) per dollar of transaction processed. (The actual numbers are a lot more complicated. Westin 5 Star can run you through it. He says he owns a processing company.)
And, if you don't think the prices of the vendor for the goods and services are increased to cover the processing fees, you are sadly mistaken. The vendor does not eat the fee with a decreased profit margin. It's passed on to you through a higher price.
There is no free lunch and, any way you look at it, you are paying something to Amex for those SPs. And, it's a lot more than 1 cent per SP. (Why would AmEx be so generous with the SPs if it was losing money by doing so?)
http://truecostofcredit.com/372542 Salty
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