Paying an individual with credit card

[feedingmywallet]

Hi,
like the title says, I was wondering if I could pay another individual without a business with a credit card (so that it counts towards cash back) and how to do it. Does it count as declarable income for the other individual?

thanks

[TheCheez]

You could use paypal?

Also I thought credit cards have a 3% fee to the seller. Someone is going to have to eat that.

[dragan69]

That individual would have to be setup to accept credit card payments via a merchant services provider (ie Moneris, Paymentech, etc...). I believe the merchant services provider would only setup these services for a registered business (sole prop, partnership, corp).

[feedingmywallet]

thank you for the quick answers :)
I have thought of paypal, but was wondering if there were ways to do it without a third party (like email bank transfers that some banks offer).

On the subject of paypal, i'm curious: are personal sales handled via paypal or any other transaction handler considered income for tax purposes? do you actually get a tax slip for those transactions?

[jerryhung]

You could use paypal?

Also I thought credit cards have a 3% fee to the seller. Someone is going to have to eat that.

Yep, either you pay 3% to the receiver, just so you can collect 1~2% worth of credit card rewards

or you pay cash, save 3%, foregone 1~2% worth of CC rewards

[joe1487]

Apart from writing a cash advance cheque to the recipient, there is no way to electronically transfer the money. Paypal is one way of doing it (and it will come through as a purchase, not a cash advance, so you will get points) but someone will have to absorb the merchant fee.

Whether it is income for the recipient depends on the nature of the transaction. Are you paying him for labour he's done for you, or are you lending a friend money? Is this remittance for a service or a gift? Many things to be considered here.

[feedingmywallet]

I am currently helping my sister pay her mortgage, and send her money every month. I figured that instead of sending her email money transfers that cost me 1.50$/transaction, i could charge it to my credit card and earn cash back (and hopefully not have to pay that transaction fee) I wouldn't pay any interest fees on it since i pay off my credit card in full every month.

From your replies i see that paypal would not be a viable option as it would cost me more money than i`d get back. would adding her to my payee list be a better idea? (is it doable?) or maybe pre authorized payments?

Thanks for the input :)

[joe1487]

Any cashback rewards you receive will be offset by the fact that she will have to pay a merchant fee of around 3%. That much is unavoidable, no matter what means you use to process the card. If you want to transfer money to her each month for free, just write a cheque to her for the full amount, go down to any branch of her bank with some information from her (account no., transit no.) and tell them to deposit it to her account. Some banks (TD, RBC, PC Financial as far as I know) allow you to add individuals as payees and pay them by online bill payment as well.

Pre-authorized payments don't seem worthwhile, as they would invoke further fees. If the payee method works, you could set up an automatic bill payment, though.

[feedingmywallet]

thanks a lot! i'll try to get more information from the bank tonight (TD). Hopefully, i'll at least avoid paying the transaction fee of 1.50$ every month.

[blink]

Some other ways I have learned to send money electronically:

1) Both of you set up free PCF accounts. It is free to transfer between members.
2) I do a bill payment for their credit card. This way they don't have to pay it themselves

[jerryhung]

thanks a lot! i'll try to get more information from the bank tonight (TD). Hopefully, i'll at least avoid paying the transaction fee of 1.50$ every month.

You can either
1. Add her to your Personal Payee in TD (you have to call to add, just get her name and account #)

2. Pay Bill monthly into her mortgage account, I don't know if this is doable

[CompWizrd]

TD won't allow you to deposit money into someone elses account.

But adding them as a personal payee will let you pay them money, I did this with my brother years ago.

[brunes]

One time a few years back when I owed someone a bunch of money, I just paid it to their power bill with online banking. They had a big credit for a few months until they used it up.

[A_guy]

If both you and your payee have a TD bank account, just get one of the tellers at the bank to set up a payee in your internet banking system.

That way, you can just log in and pay her every month at no charge (except for the transaction fee if you don't have free transactions).

[gman]

I am currently helping my sister pay her mortgage, and send her money every month. I figured that instead of sending her email money transfers that cost me 1.50$/transaction, i could charge it to my credit card and earn cash back (and hopefully not have to pay that transaction fee) I wouldn't pay any interest fees on it since i pay off my credit card in full every month.

From your replies i see that paypal would not be a viable option as it would cost me more money than i`d get back. would adding her to my payee list be a better idea? (is it doable?) or maybe pre authorized payments?

Thanks for the input :)

If what you were thinking is possible, I would be a rich man already.

You want to pay another person $N through CC, get reward and does not cost that person any money.

Well, I would have paid myself $N through CC everyday and earn the reward in an infinite loop. Then, I don't need to work and see all these reward money coming in. ;)

[jmc0]

I am currently helping my sister pay her mortgage, and send her money every month. I figured that instead of sending her email money transfers that cost me 1.50$/transaction, i could charge it to my credit card and earn cash back (and hopefully not have to pay that transaction fee) I wouldn't pay any interest fees on it since i pay off my credit card in full every month.

From your replies i see that paypal would not be a viable option as it would cost me more money than i`d get back. would adding her to my payee list be a better idea? (is it doable?) or maybe pre authorized payments?

Thanks for the input :)
in the old day, you'd just postal mail her X post dated cheques all at once (assuming no check transaction cost)

[jeeva86]

Yea, easiest way is for both of you to setup a PCF account. Or stick to paying her through TD, this will cost you only 1 transaction a month. Or if you have a TD LOC, you can pay through this.

[Archanfel]

What if you keep a positive balance on the credit card and then give her a check (I get several every now and then). Anybody knows whether any interests will be charged?

[feedingmywallet]

What if you keep a positive balance on the credit card and then give her a check (I get several every now and then). Anybody knows whether any interests will be charged?

That seems like a good idea, although i'd be surprised if there wasn't some sort of interest or fee for the cheques.

Thanks to everyone's input i have narrowed my options to:
1- Set my sister as a personal payee in my TD online bill payment, using the free transactions included in my plan.
2- set up one account each in PCF for free transfer between same bank accounts.

option no.1 seems most tempting right now, as it doesn't require me to open another account to keep track of.

[logik]

That seems like a good idea, although i'd be surprised if there wasn't some sort of interest or fee for the cheques.

Made a mistake and paid my MBNA account when there was no balance. So I wrote myself an access cheque and although I was withdrawing my own funds back, they charged me a 1% transaction fee.

I called them and they refunded it without any issues. They simply explained that it's purely systematic and for some reason their system doesn't recognize that it actually owes us money.

And for anyone wondering...there were no interest charges.

[joe1487]

Made a mistake and paid my MBNA account when there was no balance. So I wrote myself an access cheque and although I was withdrawing my own funds back, they charged me a 1% transaction fee.

I called them and they refunded it without any issues. They simply explained that it's purely systematic and for some reason their system doesn't recognize that it actually owes us money.

And for anyone wondering...there were no interest charges.

If you call them, they'll wire transfer any credit balance to you with no fee (or a cash advance, for that matter, but then the 1% fee applies).

[Jacklad]

Most Canadian cards don't charge transaction fees on convenience cheques. Of my credit cards, MBNA is the only one that charges a transaction fee at all. RBC Visa, CIBC Visa, BMO Mosaik, Canadian Tire, PCF, Capital One, Citi all charge nothing.

Jackie

[Jucius Maximus]

Hi,
like the title says, I was wondering if I could pay another individual without a business with a credit card (so that it counts towards cash back) and how to do it. Does it count as declarable income for the other individual?


Here's how I've done it in the past: I got the person gift certificates at a store where they shopped anyway. Also as a seller, this works great for internet purchases because the other person just bought me amazon gift certificates; I get the money instantly without paypal stealing any of it. And the possibility of fraud affecting me is nil.

[brunes]

Here's how I've done it in the past: I got the person gift certificates at a store where they shopped anyway. This works great for internet purchases because the other person just bought me amazon gift certificates; I get the money instantly without paypal stealing any of it. And the possibility of fraud affecting me is nil.

That's a good idea. You could also buy gas gift cards; they will be sure to use those.

[tmms]

TD won't allow you to deposit money into someone elses account.



Last October, I actually deposited money into my son's account through a TD teller.
I asked if it was possible, she consulted another person (manager?), and the answer was "yes". I hadn't felt like that transaction was any kind of exemption. I had to know my son's account number, though.


.

[jmc0]

That seems like a good idea, although i'd be surprised if there wasn't some sort of interest or fee for the cheques.

Thanks to everyone's input i have narrowed my options to:
1- Set my sister as a personal payee in my TD online bill payment, using the free transactions included in my plan.
2- set up one account each in PCF for free transfer between same bank accounts.

option no.1 seems most tempting right now, as it doesn't require me to open another account to keep track of.
I know some people do #2, actually they set up a joint account with PCF; works great.

[bellboy26]

Hi,
Does it count as declarable income for the other individual?

thanks

That depends on what they individual is receiving the funds for.
Would have nothing to do with how he received them.

[bellboy26]

Last October, I actually deposited money into my son's account through a TD teller.
I asked if it was possible, she consulted another person (manager?), and the answer was "yes". I hadn't felt like that transaction was any kind of exemption. I had to know my son's account number, though.


.
Your right you can make 3rd party deposits. As long as you know the account #.