I just paid off a company vehicle with this company. I have seen plenty of chatter about this service, but I don’t think that anyone has really picked it apart yet. It is a great service, very reliable and fast. It is easy to use and if done properly quite affordable.
In fact the way I have been using their service, I pay about $0.0028 for every Chase Ultimate Rewards point (earned through either Sapphire Preferred or Ink Bold credit cards) which can easily be transferred into United miles, Hyatt Gold Passport points, or any of the programs points and miles options without a fee.
So here is the big secret, you MUST pay in increments of $500 to get the best deal on car loans ($750 for mortgages). If your payment is $1,000 you are in luck! Just make two separate payments of $500 each every month. If your payment is $450 you can do like I do and just pay the additional on the loan and feel better about getting debt free sooner!
Here is the math I used to calculate my cost of doing business with this company (or the cost to buy one credit card point):
When you first sign up, every 3rd payment is $10.00 off per their ongoing promotion.
So for $1,500 in car loan payments I paid $19.85 to this company in fees. (1.32%)
To take this a little further, you are getting something for the interest as well. You are not paying anything for the credit card interest as you should be paying your ENTIRE BALANCE in full before you ever consider getting rewards for spending anything. Anyways, your bank is crediting you today for money you have not yet had to pay out of pocket (because your floating it on the cc). This is saving you interest on your loan. Figure that your loan is at 4% and that you get 55 days on your card (you should ALWAYS maximize the float by paying on the first day of a new credit card cycle – more on this in a future post).
Interest Saved 4% for 55 days = 0.60% of the amount paid
Then you want to get 1.5 points per $ (or more) on what is commonly referred to as the OLD Chase Bold card for spending $100k per year on the card or a similar card like the Chase United Club card which is 1.5 miles per $ all the time.
To sum it up, we have $19.85/$1,500 = 1.32%
1.32%/1.5 points per $ = 0.88%
0.88% – 0.60% = 0.28% or $0.0028 net per point.
The math is just about the same for mortgages but you need to pay in increments of $750 and the gross fee is 50% higher. The net is still very cheap points/miles.
These points can be valued at nearly $0.02 each by many. If you prefer to use a fixed value card like the Capital One Spark which is 2% then you are netting out 1.72% return for every dollar.
Another side benefit of this is that you need to keep less cash in the checking account as you have less charges coming out. Most everything goes on the credit cards (for points of course!) then you only need to have the cash to pay these cards (in full, always!).
I hope this works as well for you as it does for me!