The timeshare industry is tabbed as high risk. Timeshare businesses are also called “vacation owner programs.” They are associated with organizing time for different people to use the property throughout the year. Owners agree to pay certain fees on a yearly basis to maintain the property. As a rule, properties are divided among 25 owners at 2 weeks each; 2 weeks a year are left for maintenance and repairs.
Modern owners are looking for more flexibility in their vacation choices. Today, companies often offer timeshare exchange programs at a fee.
It’s interesting to note that in the US, timeshares sales made up $7.9 billion in 2014. In 2015, vacation timeshares sales in the US accounted for $8.6 billion.
In 2015, the average timeshare purchase in the US cost more than $22 thousand, which has been the highest average for the past 5 years. This cost doesn’t include the yearly maintenance fee, which reached $880 in 2014, up from $731 4 years previously.
Credit Card Processing for Timeshare Businesses
If you’re involved with timeshares, securing a merchant account tailored to your needs can be challenging from traditional banks because of risks associated with your high risk business and legal exposure. Fortunately, a reputable payment processor like emerchantbroker.com can get you a low-cost and reliable timeshare merchant account with ease. EMB, the #1 high risk merchant account provider in the US, boasts an A+ rating with the BBB and an A rating with Card Payment Options.
There are cases when timeshare owners owe some money to the owner of the given timeshare and would like to pay it off with a credit card, then pay that credit card off right away and get some perks for doing that.
Let’s consider the timeshare is owned through, e.g. Marriott. As a rule, they don’t accept credit cards for large payments, including rent and mortgage payments. The rewards you receive are paid for by the payment recipients in the form of credit card merchant fees, which can represent 2-4% of the payment. This is an amount that not many companies are willing to part with for large payments they are owed.
On the other hand, if they agree to accept credit cards, they’ll charge a processing fee, which will be a percentage of the amount owed. Be aware these fees usually equal or exceed the value of the credit card rewards you expect to earn.
These fees will make sense if you qualify for a unique promotion. E.g., many travel-related cards offer status elite qualifying miles when customers reach a certain annual threshold.
In the best-case scenario, your credit card will be accepted without any fees. In this case, you’d better put off these charged on a rewards card, so long as you have the amount to pay off your balance in full and on time. Make sure to pay the day after your statement closes so to get almost 2 months of free float before the payment is due.