Should Tesla Issue a Tesla Branded Credit Card?

[Cattledog]

If they did, and it had comparable benefits (points good for gear + merchandise, access to events, maybe even $ off next car purchase) to your existing card(s), would you get one and use it?

Of course it would have to come in several levels, each with increasing annual fees, perks, and qualification standards:

Tesla Card
Tesla 'Performance' Card
Tesla 'Signature' Card

Whattyathink?

 

[astrotoy]

I think Tesla would only do this if they needed sales and were willing to do a discount based on the CC points. Otherwise, they would just be paying the CC company to issue the points. Many years ago GM had a Mastercard where you could earn 3 or 4 cents per dollar purchased and use it to buy any GM car - you negotiated with the dealer for the price and only then was the discount taken. I remember having about $4000 in credits and I got a Geo Prizm for my daughter, I bought it for dealer invoice which was $16K and I bought it for $12K - built to my spec by the factory. Coincidentally it was the NUMMI plant in Fremont where our Teslas are built.

 

[AudubonB]

Well, since you're kind enough to ask, I'll let you know what this merchant thinks:

I think it stinks.

I despise ALL so-called "rewards" cards, without exception. Why? Because, as everyone knows, the cardholder is able to make use of purchases to amass some sort of "points", or "credits", or "miles", and so on.

But whoinhell pays for these benefits? Tesla (Delta, Exxon, Niemann Marcus, etc.)? No.
Wells Fargo? Citigroup? HSBC? No.
The cardholder? No - not directly. A $99.99 item costs him or her $99.99 no matter how it is paid for.
Visa/MasterCard/Discover/AMEX? Ha ha ha ha ha ha!

The unfortunate answer is that it is the merchant who directly pays. When someone pulls a bog-standard no-attachment straight bank card on me, I fork over X percent of that sale to Visa for the privilege of having that purchase processed through the Wonderful World Of Visa. (Right now, "X" is about 2 percent or so). BUT....if it's one of these "affiliate", or "reward" cards....I must grit my teeth and accept it, and for the buyer's "Teslapoints" - it is I the powerless merchant who must accept that card and must fork over an increased processing charge of up to about five percent!

It really is horrifically unfair. The recent immense class action lawsuit against Visa and Master Card has very slightly righted the situation, but only very slightly.

As such, out of consistency, I refuse to own any such cards...which of course makes me cringe as when, for example, I am in an airplane and think of how much less my seatmate paid for her seat, as she amassed so-called miles just by flashing her United FF card.

Well, ya asked whattaIthink!

 

[Doug_G]

+1 AudubonB. This "premium card" nonsense has been eating away more and more at merchants' margins in the past few years. The credit card companies do things like give 1% back to their cardholders, and make the merchants pay for it. They claim this is a benefit for the merchant, but that is utter nonsense. It doesn't promote our businesses; it promotes theirs, and we get forced to pay for it. There's a growing backlash from merchants; it will be interesting to see where that leads.

 

[neroden]

I'd make another point. None of the major banks which issue "branded" credit cards are reputable. They're all disreputable. If I were Tesla I wouldn't want to become identified with any of them.

 

[Cattledog]

OK. Have a warm glass of milk everyone and it will be alright. Didn't realize merchants felt so helpless. Do you need to be, or sound to be that defenseless? If Tesla can take on Big Oil, couldn't y'all take on Big Plastic? Or how about pumping PayPal, a retro Elon support move?

 

[bonnie]

I had no idea that rewards cards hurt the merchant like that. Sorry guys ...the card companies have done a masterful job of hiding that information from the consumer. I know a lot of businesses are surviving on very thin margins, so this is the last thing needed.

 

[ItsNotAboutTheMoney]

OK. Have a warm glass of milk everyone and it will be alright. Didn't realize merchants felt so helpless. Do you need to be, or sound to be that defenseless? If Tesla can take on Big Oil, couldn't y'all take on Big Plastic? Or how about pumping PayPal, a retro Elon support move?

Yes and they can't apply different surcharges for the different cards. However, Durden(?) amendment to Frank-Dodd did finally give them a legal right to discount other methods of payment, which previously credit card companies would try to rule out by contract.

If it's a local business I try to use cash, but national chains I use a cashback card, sknce the money's leaving anyway.

Recently a gas station chain here began issuing an unlinked debit card with a 10c/gal discount. It's my usual gas station anyway so I jumped on it. Gas stations pay some of the highest percentages in fees while the payment card (through a Floridian company) uses the Federal clearing and has a fixed fee that's much lower. They get lower fees, customer gets lower prices and they get more of my custom. (Can't pay in cash at the pump, here. Maine doesn't allow surcharges for payment methods.)

There is not a chance in hell of Tesla associating themselves with credit cards. It'd destroy good will.

- - - Updated - - -

I had no idea that rewards cards hurt the merchant like that. Sorry guys ...the card companies have done a masterful job of hiding that information from the consumer. I know a lot of businesses are surviving on very thin margins, so this is the last thing needed.

Right. It's a massive game of prisoner's dilemma and the credit card companies know it. The jailor's success depends on people not being able to communicate or not be able to gain individually. There are two key traps.
- The rewards card makes it better for an individual to buy with the card, encouraging its use.
- If a merchant offers discounts to cash buyers they lose the prior cash purchase subsidy with the hidden margin for credit card use. As a result, to maintain margin they would have to raise prices for the credit card users, which could lose them big-spending consumers to other merchants.

Throw in contractual restrictions to hides the fees and lobbied laws againts surcharges and you have the current situation.

 

[neroden]

OK. Have a warm glass of milk everyone and it will be alright. Didn't realize merchants felt so helpless. Do you need to be, or sound to be that defenseless? If Tesla can take on Big Oil, couldn't y'all take on Big Plastic? Or how about pumping PayPal, a retro Elon support move?

I know merchants who offer discounts to anyone who pays cash. Sadly this is a lot harder to do if you're a merchant over the Internet.

- - - Updated - - -

PayPal developed a seriously problematic reputation among merchants (the details are not worth going into), so there's a reason that merchants are not all ditching credit cards for PayPal.

 

[Doug_G]

Yes and they can't apply different surcharges for the different cards.

Right, we're not allowed to charge the merchant discount rate back to the consumer. And we often don't know what the rates are for the cards that are being used - until we get the statement.

Right. It's a massive game of prisoner's dilemma and the credit card companies know it.

This is starting to change. I saw a news story the other day about this issue. They interviewed the owner of a famous deli in Montreal who stopped taking credit cards because of the rapidly growing reward card discounts. Can't say I blame them.

My company has refused to take Amex for many years because of their ludicrously high merchant rates. The gap has been narrowing recently. Unfortunately, the movement has been mostly in the wrong direction - VISA and Mastercard increasing to match.

Needless to say I totally agree, Tesla should stay away from credit card companies!

 

[Lloyd]

I understand that if you carefully word a statement offering a cash discount to all customers the cc companies can't dispute that. You are not allowed as a merchant by your contract to charge the discount fee to the customer.

 

[vfx]

I have a Tesla credit card.

 

[brianman]

I have a Tesla credit card.

Pic?

 

[ItsNotAboutTheMoney]

I have a Tesla credit card.

I presume that's one of those choose your picture deals?