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Just a quick followup on my earlier article about Citi Dividend Platinum Select cards being converted to Dividend World MasterCards. KMC of AdvancedPersonalFinance e-mailed me to share the following bit of information:
“A friend’s wife is setting up a business and she’ll be taking credit cards. On the schedule of fees, they specifically mention several cards including ‘World Mastercard‘ for special treatment… Merchants must pay an additional fee when customers use these kinds of cards.”
Just as I suspected, this “upgrade” isn’t motivated by a desired to reward you “due to your noteworthy card history.” Rather, it seems to be driven by a desire to increase merchant processing fees. Not terribly surprising, but I though y’all might be interested.
3 Responses to “Followup: Citi Dividend Platinum Select Card Conversions”
I’m still trying to see what’s the difference between a Platinum or Titanium credit card versus a World Mastercard or World Visa. The benefits seem to be all the same. The only difference: “no pre-set spending limits” with World, even thought they state it’s not an unlimited amount; because you still have a “revolving credit limit.”
In regards to the higher fees that MasterCard USA charges, those fees are actually published at their corporate website; and it’s quite high… thought it depends on the MasterCard Consumer credit card program used; such as ConsumerCredit’s Core Value, Enhanced Value, World, World Elite, Consumer Debit, Commercial/Corporate World, Government, Small Business. The cheapest: consumer debitp; most expensive: World and Commercial/Corporate. They have different fee structures for different purchase categories. Very interesting.
World MasterCards and Visa Signatures have higher interchange rates (the fee the acquirer pays the issuer) and therefore higher discount rates (the fee the merchant pays its bank) because these cards are higher level with much better benefits than Platinum level cards (go to the MasterCard and Visa websites to see the benefits). These benefits are free to the cardholder, but someone has to pay for them.
Nothing amazes me anymore. I wonder what the justification for higher merchant fees are for these cards?