When Buying gold with a credit card...

When buying Gold with a credit card, how is it treated by the credit card company?

I know the fees at Goldmoney are 0,5%, but that is not nearly enough for the normal fees charged by the credit companies like Visa or Mastercard to the merchants... It usually is more than 2%. Who is responsible for those fees?
When I buy physical from a broker I pay an additional premium (fees) if I pay with credit (For those broker who accept it) et can go as high as 4% more for my purchase.

With GoldMoney, even with a buy fee and redemption fee, it is only 1%...
Does GoldMoney have an special rate with Mastercard and Visa to lower the fees? If so, they did better than Walmart...

Don't get me wrong here, I love GoldMoney and I buy here since BitGold 2015. I just want to understand it better! My credit card gives me a 1.5% cash back. So if I buy and redeem gold at 0.5% each transaction (so 1% from my bank account to my bank account), I win 0,5% every time (here I don't add or substact the effect of the price of Gold). Someone is paying and something tells me it is not Mastercard.

Am I missing something ?

Thanks!


Comments

  • LPDLPD Posts: 28 Tin ✭
    I have asked this a few times, and I think it goes something like this.

    Goldmoney accepts deposits with credit card at a 0.5% fee. They pay the 2% vendor fee. They are willing to eat the difference for now in order to grow the platform. If an account abuses this beyond Goldmoney's tolerance, then they reserve the right to change the fee structure.

    This is me reading the tea leaves through the nebulous comments regarding the subject.
  • GoldIsCurrencyGoldIsCurrency Posts: 1,782 Gold ✭✭✭✭✭
    @Melanie Maybe you could clarify @LeFinanciste 's question. I think this is something many of us have thought about.
  • LeFinancisteLeFinanciste Posts: 42 Copper ✭✭
    It adds up to the larger question of How can it be profitable?

    For every deposit with credit card they loose -100% minimum...

    We are talking about the best platform to invest in gold out there . Way above ETF and funds and more liquid than physical.
    This is a market where the margins are super low and yet, they can easily beat the broker prices for delivery of goods (2 oz of gold or more and around 50 oz of silver or more).
    The pre-payed mastercard is a great idea. For me, with my poor canadian dollars, I can invest in USD for the best rate of exchange out there(since I am a smal investors and cannot afford Forex rates and because Banks and Credit card charges 2.5% each ways...).
    The Golden heart referal program is Insanely generous...

    I feel like we are getting a free meal here.
    Is it to good to be true? Can it sustains this forever? I feel it is safer to deal through Goldmoney than to own the stocks (XAU.To)?
    What do you think?
  • TheRaveneerTheRaveneer Posts: 105 Bronze ✭✭✭
    Cost of doing business to grow their platform. If we think we're getting a free meal, we're more likely to deposit. I would deposit $20k today if they accepted AMEX for this very reason. I can't tell from their comments if it's because the "London processor" doesn't support it any more, or if the AMEX merchant fees were too large to "eat". Still waiting...
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