Why would B&H promote this??

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Timzee Senior Member • Posts: 1,052
Why would B&H promote this??

Spent tens of thousands of dollars over decades at B&H and have never had anything negative to say about them. However when I received my last order from them ($300) there was a card inserted promoting this "Payboo" card that one could use to save sales tax in some instances.

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge, but hey-- I can't imagine why B&H would want to have anything to do with this card.

Would I use it? Well, I guess if I was buying an expensive item from their store I'd have to consider it, but at the same time it would leave me with a bitter taste by promoting this "service".

Just my $.02...

mamallama
mamallama Forum Pro • Posts: 55,555
Re: Why would B&H promote this??
14

Timzee wrote:

Spent tens of thousands of dollars over decades at B&H and have never had anything negative to say about them. However when I received my last order from them ($300) there was a card inserted promoting this "Payboo" card that one could use to save sales tax in some instances.

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge, but hey-- I can't imagine why B&H would want to have anything to do with this card.

Would I use it? Well, I guess if I was buying an expensive item from their store I'd have to consider it, but at the same time it would leave me with a bitter taste by promoting this "service".

Just my $.02...

They pay your sales tax to get you indebted in an outrageously high interest credit card. What could go wrong?

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Lensmate
Lensmate Veteran Member • Posts: 3,710
Re: Why would B&H promote this??
5

Timzee wrote:

Spent tens of thousands of dollars over decades at B&H and have never had anything negative to say about them. However when I received my last order from them ($300) there was a card inserted promoting this "Payboo" card that one could use to save sales tax in some instances.

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge, but hey-- I can't imagine why B&H would want to have anything to do with this card.

Would I use it? Well, I guess if I was buying an expensive item from their store I'd have to consider it, but at the same time it would leave me with a bitter taste by promoting this "service".

Just my $.02...

Astuteness saves money, laziness will cost you... its a buyer beware out there! Use credit cards wisely and they won't bilk you.

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Schrodingers_cat Senior Member • Posts: 2,518
Re: Why would B&H promote this??
9

Timzee wrote:

I can't imagine why B&H would want to have anything to do with this card.

Because they think it will generate sales for them ?

Tom_N Forum Pro • Posts: 15,729
Re: Why would B&H promote this??

Timzee wrote:

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

Credit card interest rates are ridiculous.  As a rule, I pay my balance in full every month.  Even when you do this, merchants must pay a fee of something like 3% of every sale to the bank.  That translates to a gross annual rate of 42% for charges paid on time.

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge, but hey-- I can't imagine why B&H would want to have anything to do with this card.

Perhaps it was a way of getting the credit card bank to pay for some or all of the cost of the promotion.  I don't know what arrangement B&H has with the credit card bank, but we can make an educated guess (speculation) as to why they might have arrangement.

Suppose that you were selling an expensive camera with a 5% gross profit margin, and  were offering an instant credit equal to a 7% sales tax.  Would you prefer to pay the full instant credit yourself?  Or would you like to make a bargain with a card issuer:  I'll drive business to you, if you waive the merchant fee on purchases made from my business?

That might be the difference between making a thin profit, and losing money on every sale.

Marek M Contributing Member • Posts: 936
Question
1

Timzee wrote:

Spent tens of thousands of dollars over decades at B&H and have never had anything negative to say about them. However when I received my last order from them ($300) there was a card inserted promoting this "Payboo" card that one could use to save sales tax in some instances.

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge, but hey-- I can't imagine why B&H would want to have anything to do with this card.

Would I use it? Well, I guess if I was buying an expensive item from their store I'd have to consider it, but at the same time it would leave me with a bitter taste by promoting this "service".

Just my $.02...

So, you want to buy at BH or you want to borrow money from them?

Dennis Forum Pro • Posts: 19,067
Seems pretty simple to me
19

B&H (and other online retailers) had an edge over brick & mortar stores when they didn't have to charge sales tax. Now they've lost that edge when it comes to fixed-price merchandise. So now they offer you a credit card that gets you an instant credit equal to the amount of sales tax you pay. In return, they get a customer who's more likely to buy from B&H because of that benefit.

No idea if they get any of the interest - I would guess that most, if not all, goes to the bank. I don't even look at interest rates on cards - borrowing to buy anything other than a house or a first car is just throwing money away, regardless of the rate.

- Dennis
--
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Alex Ethridge
Alex Ethridge Veteran Member • Posts: 3,995
Re: Seems pretty simple to me
1

Dennis wrote:

borrowing to buy anything other than a house or a first car is just throwing money away, regardless of the rate.

- Dennis

Agreed.

I pay mine every month, and sometimes before the bill even comes.

Credit cards are for convenience only, terrible for borrowing money.

American Express called one day and said they were concerned that charges were being made that seemed outside my usual habits.  I asked the balance (bill had not come) and issued payment.

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CMCM Senior Member • Posts: 4,234
Re: Seems pretty simple to me
2

Alex Ethridge wrote:

Dennis wrote:

borrowing to buy anything other than a house or a first car is just throwing money away, regardless of the rate.

- Dennis

Agreed.

I pay mine every month, and sometimes before the bill even comes.

Credit cards are for convenience only, terrible for borrowing money.

American Express called one day and said they were concerned that charges were being made that seemed outside my usual habits. I asked the balance (bill had not come) and issued payment.

Exactly!  I use credit cards 100% for convenience, and I pay them well before the due date so in 35 years I haven't paid a cent in interest to any cards.  I saw the 29% interest of the Payboo card and found it rather shocking, but it wouldn't affect me anyway as I would pay the amount due immediately.  On a high priced item the savings would be good.  If you are someone who carries a balance, then having this card wouldn't save you anything and would actually cost you more, most likely.

I would imagine that B&H wants to retain their edge now that they must pay sales tax, so this is a way to restore that advantage....a bit.

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BrownieVet Senior Member • Posts: 1,731
Re: Why would B&H promote this??
1

Timzee wrote:

* * * snip * * *

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

The APR of my credit card is 11.9% but since I always pay the entire balance as soon as the bill arrive,  I never pay a single red penny for interest. Have been doing that for 49 years. While I pay $105 annual membership fee, I get over $2K rebate.  I only make purchase when I have money for that purchase.

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge,

If I were you, I'll use the card to save on the sales tax BUT pay the bill in full before the due date.  So as not to forget,  pay the bill as soon as it arrive.

Would I use it? Well, I guess if I was buying an expensive item from their store I'd have to consider it, but at the same time it would leave me with a bitter taste by promoting this "service".

Don't take it personal.  Use it to your advantage.

Just my $.02...

lilBuddha Veteran Member • Posts: 4,350
Re: Why would B&H promote this??
7

Timzee wrote:

Spent tens of thousands of dollars over decades at B&H and have never had anything negative to say about them. However when I received my last order from them ($300) there was a card inserted promoting this "Payboo" card that one could use to save sales tax in some instances.

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge, but hey-- I can't imagine why B&H would want to have anything to do with this card.

Would I use it? Well, I guess if I was buying an expensive item from their store I'd have to consider it, but at the same time it would leave me with a bitter taste by promoting this "service".

Just my $.02...

  • They are paying your taxes.
  • It costs you nothing if you do not leave a balance on the card.
  • The issuing bank is likely driving the high rate to lower the acceptance threshold so that more customers qualify.
  • No one is forced to use the card

Legally, most states have required the buyer to pay sales tax and the buyers have enjoyed a free ride by ignoring this. Whilst that card rate is high, properly used the buyer can still enjoy that advantage at B&H's expense. Not seeing the complaint.

mamallama
mamallama Forum Pro • Posts: 55,555
Re: Seems pretty simple to me

Dennis wrote:

B&H (and other online retailers) had an edge over brick & mortar stores when they didn't have to charge sales tax. Now they've lost that edge when it comes to fixed-price merchandise. So now they offer you a credit card that gets you an instant credit equal to the amount of sales tax you pay. In return, they get a customer who's more likely to buy from B&H because of that benefit.

This promotion is capitalizing on the emotional upset some B&H customers are having at losing their way to avoid paying state sales tax. Avoiding state sales tax is apparently that important to some that this credit card is a welcome opportunity.

No idea if they get any of the interest - I would guess that most, if not all, goes to the bank. I don't even look at interest rates on cards - borrowing to buy anything other than a house or a first car is just throwing money away, regardless of the rate.

- Dennis
--
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LoneTree1 Contributing Member • Posts: 922
Re: Why would B&H promote this??

Remember when prime rates in the late 70's were 13%?  Even then, high credit card rates were only about 25%.  Credit card companies and banks are vultures.  They charge merchants up to 5 percent on credit card sales so they can give money back to people who use premium credit cards.  Here's hoping despite the initial years or volatility, things like virtual currencies take-hold.

WunWegWunDarWun Regular Member • Posts: 410
Re: Why would B&H promote this??

Timzee wrote:

Spent tens of thousands of dollars over decades at B&H and have never had anything negative to say about them. However when I received my last order from them ($300) there was a card inserted promoting this "Payboo" card that one could use to save sales tax in some instances.

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge, but hey-- I can't imagine why B&H would want to have anything to do with this card.

Would I use it? Well, I guess if I was buying an expensive item from their store I'd have to consider it, but at the same time it would leave me with a bitter taste by promoting this "service".

Just my $.02...

All the credit card "cash back" programs are based on having some people not pay on time and end up paying interest, the fewer customers they have and the better they are on average paying their CC bills on time the higher the APR would have to be.

Tom_N Forum Pro • Posts: 15,729
Re: Why would B&H promote this??
1

lilBuddha wrote:

  • They are paying your taxes.

I believe that "merchant pays your tax; offers 'tax-free' purchases" may run afoul of laws in some states.  So this is an instant credit that just happens to match the amount of the tax.  They are still collecting the actual tax from you, and forwarding your tax payment to the state.

Tom_N Forum Pro • Posts: 15,729
Re: Why would B&H promote this??

WunWegWunDarWun wrote:

All the credit card "cash back" programs are based on having some people not pay on time and end up paying interest, the fewer customers they have and the better they are on average paying their CC bills on time the higher the APR would have to be.

Depends on the "cash back" level.  Remember that the credit card companies get several percent of each sale even if you never carry a balance.

For instance, suppose that you do all of your grocery shopping with cash or a debit card.  A card issuer offers a "1% cash back" card to get you shop with their credit card, instead.  It might be worth it to them to give up 1/3 of the merchant fee on grocery sales in order to get the other 2/3 (2% of your grocery spending) they would not otherwise have had.

WunWegWunDarWun Regular Member • Posts: 410
Re: Why would B&H promote this??

Tom_N wrote:

WunWegWunDarWun wrote:

All the credit card "cash back" programs are based on having some people not pay on time and end up paying interest, the fewer customers they have and the better they are on average paying their CC bills on time the higher the APR would have to be.

Depends on the "cash back" level. Remember that the credit card companies get several percent of each sale even if you never carry a balance.

For instance, suppose that you do all of your grocery shopping with cash or a debit card. A card issuer offers a "1% cash back" card to get you shop with their credit card, instead. It might be worth it to them to give up 1/3 of the merchant fee on grocery sales in order to get the other 2/3 (2% of your grocery spending) they would not otherwise have had.

Perhaps, though that would lead to  margin-eroding competition and financial institutions are not really into that

But yeah part of it would be that B&H would be saving on CC commissions assuming this Payboo thing is either owned by them or offers them lower commissions than the big credit cards.

Doug J Forum Pro • Posts: 10,235
Re: Why would B&H promote this??

Tom_N wrote:

WunWegWunDarWun wrote:

All the credit card "cash back" programs are based on having some people not pay on time and end up paying interest, the fewer customers they have and the better they are on average paying their CC bills on time the higher the APR would have to be.

Depends on the "cash back" level. Remember that the credit card companies get several percent of each sale even if you never carry a balance.

For instance, suppose that you do all of your grocery shopping with cash or a debit card. A card issuer offers a "1% cash back" card to get you shop with their credit card, instead. It might be worth it to them to give up 1/3 of the merchant fee on grocery sales in order to get the other 2/3 (2% of your grocery spending) they would not otherwise have had.

I expect this is true. The Amazon "store card" is from the same bank as the Payboo card - Synchrony, the Amazon store card also carries a very high APR @ 28.2%. These cards are restricted to purchases from their respective reseller businesses and there may not be a merchant transaction fee, with the high APRs basically offsetting this and any buyer discounts that are applied.

All the bank needs is a high enough number of customers that carry a balance to come out at least even, if not ahead, compared to income they earn from the more traditional, universally accepted revolving credit cards

Cheers,
Doug

Michael Fryd
Michael Fryd Forum Pro • Posts: 11,232
Re: Why would B&H promote this??

BrownieVet wrote:

Timzee wrote:

* * * snip * * *

Searched here and found a few discussions related to Payboo and I have to admit it sounded good UNTIL I looked into the terms. The annual Percentage Rate (APR) for
Purchases is 29.99 per cent! Further searches reveals the average APR these days is 17.73% which is high enough, but 30%?!

The APR of my credit card is 11.9% but since I always pay the entire balance as soon as the bill arrive, I never pay a single red penny for interest. Have been doing that for 49 years. While I pay $105 annual membership fee, I get over $2K rebate. I only make purchase when I have money for that purchase.

Now obviously if one pays the balance before the due date they can avoid this ridiculous surcharge,

If I were you, I'll use the card to save on the sales tax BUT pay the bill in full before the due date. So as not to forget, pay the bill as soon as it arrive.

Would I use it? Well, I guess if I was buying an expensive item from their store I'd have to consider it, but at the same time it would leave me with a bitter taste by promoting this "service".

Don't take it personal. Use it to your advantage.

Just my $.02...

The fine print for the payboo card is online at https://etail.mysynchrony.com/cs/groups/public/documents/et_tcdoc/e054945.pdf

For "promotional purchases" they charge interest from the purchase date, even if you pay each statement in full at the end of the month.

It is not clear to me whether the sales tax rebate makes the transaction a "promotional purchase."   If it is a promotional purchase, you pay interest from the data of purchase, even if you pay in full each month.

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Black Elk
Black Elk Forum Member • Posts: 97
Re: Why would B&H promote this??

If you are gullible enough to buy in to this then go for it. Trust me, the folks at B&H are very astute, savvy business people and know exactly what they are doing. The credit card company also knows what they are doing. There is no risk at their end and the buyer assumes all of the risk. I do cash only on all of my purchases and paying sales tax is minor compared to the potential results of getting yourself in to a interest rate such as this. Just a thought.

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