Paying Sub With Credit Card - Covered ?

alxmorgan

Hi all,

Just wondering if I was to pay my yearly sub on credit card and club subsequently folded would I have any comeback ?

Don't think there's a danger of it but given the South County experience I'm trying to be ultra-careful

thanks

IanPoulter

I'm told that it's covered but if you're uncertain then perhaps the direct debit is a safer option albeit at a 5% premium.

ssbob

alxmorgan wrote: »

Hi all,

Just wondering if I was to pay my yearly sub on credit card and club subsequently folded would I have any comeback ?

Don't think there's a danger of it but given the South County experience I'm trying to be ultra-careful

thanks

What club you looking at Alx? I know with our club we have a written guarantee from the Receivers that our funds are "Ring-fenced", can't see how this is legally possible but I have the piece of paper from the very reputable accounting firm so I can sue them if I don't get it back from the club:D

Russman

You'd think it would be alright. I was caught up when Total Fitness folded a few years ago but because I'd paid my sub by credit card I got a refund for the unused portion (10/12 if I remember correctly).
Then again, if its a member owned club that might change the status of the sub....?
Worth looking into I'd say.

rockonollie

I've always been told that in the case of an organisation folding, it's much easier to recover money from a credit card transaction than a laser or check.

link_2007

I may be wrong here but I would have thought it differs from card to card (e.g one bank provides insurance for transactions over €x whereas another does not) so it may be most advisable to contact the financial institution the card is with and check what cover they provide and if there is any threshold the transaction must be over.

rockonollie

The difference lies in the liquidation and repayment of debtors..........when a group goes under, everyone who they owe money applies for that money back.....most of the time there isn't enough money to pay everyone.....so they pay the biggest debts off first.....so John Smith saying they owe him 200 euro won't go very far.....but if John Smith disputes the charge with his card issuer, as do 20 other suscribers that use the same issuer......suddenly that issuer is going after a debt of 4200 euro.....which will have a much better chance of being repaid.

link_2007

rockonollie wrote: »

The difference lies in the liquidation and repayment of debtors..........when a group goes under, everyone who they owe money applies for that money back.....most of the time there isn't enough money to pay everyone.....so they pay the biggest debts off first.....so John Smith saying they owe him 200 euro won't go very far.....but if John Smith disputes the charge with his card issuer, as do 20 other suscribers that use the same issuer......suddenly that issuer is going after a debt of 4200 euro.....which will have a much better chance of being repaid.

That's assuming that there's assets/cash left after all secured creditors have been paid.

Cairn

rockonollie wrote: »

The difference lies in the liquidation and repayment of debtors..........when a group goes under, everyone who they owe money applies for that money back.....most of the time there isn't enough money to pay everyone.....so they pay the biggest debts off first.....so John Smith saying they owe him 200 euro won't go very far.....but if John Smith disputes the charge with his card issuer, as do 20 other suscribers that use the same issuer......suddenly that issuer is going after a debt of 4200 euro.....which will have a much better chance of being repaid.

I don't think this is the way it works, there's a hierarchy of creditors, the secured creditors (usually Banks, Revenue etc) get first call, then employees (not sure if they are secured) then unsecured creditors (suppliers, members, voucher holders etc).

The amount of the debt is not a factor in detrmining who gets paid. If there is anything left for the unsecured guys then they get an equal proportion eg 12cents per 1euro owed.

The potential advantage of credit card payment is that some cards give purchase protection insurance.

PARlance

Cairn wrote: »

I don't think this is the way it works, there's a hierarchy of creditors, the secured creditors (usually Banks, Revenue etc) get first call, then employees (not sure if they are secured) then unsecured creditors (suppliers, members, voucher holders etc).

The amount of the debt is not a factor in detrmining who gets paid. If there is anything left for the unsecured guys then they get an equal proportion eg 12cents per 1euro owed.

The potential advantage of credit card payment is that some cards give purchase protection insurance.

Employees would fall into same class as unsecured creditors. However they would usually get preference over other creditors if they are required, by the liquidator to work through the liquidation process... Ie without their cooperation, the assets of the business may be worth considerably less and they liduiqator can pay them in full for their services.

alxmorgan

Thanks for the replies guys. Sounds like I need to check with my credit card company.

GreeBo

Payment by CC would be for protection, your CC refunds you the money, then they go after the money owed as creditors.

If you dont have PP then there is no difference.

PARlance

GreeBo wrote: »

your CC refunds you the money, then they go after the money owed as creditors.

You be surprised (I was anyway) at the amount of instances where no follow up is carried out at all.
They've cost/benefit models-matrix coming out of their ar***
A hell of a lot of bad debt/fraud etc is just thrown into their provisions and not followed up at all.

Just a little aside
Did a bit of work in that area last year. (not the fraud side )