MF Payment Schedule

[Dolphin]

Not sure if this subject has been discussed before, but was at dinner last night with friends who are TS owners and got into this discussion.

They told us that during a presentation a salesrep (I know, his lips where moving) told them that Marriott was looking at the possibility of spreading MF fee payments over the year by giving an option to pay out on a monthly schedule. MF are due right after Christmas and near tax time so it can be a lot of cash flow going out during this time of year.

Was wondering if anyone has heard of this as a possibility? If I could spread my MF out I would even consider maybe buying another resell. If not monthly, maybe pick to pay out a couple in Jan and then rest in June....

Of course I guess I could setup on my own to save monthly and payout from that bucket in Jan. Just wondering what others might have heard on this..

 

[FractionalTraveler]

Not sure if this subject has been discussed before, but was at dinner last night with friends who are TS owners and got into this discussion.

They told us that during a presentation a salesrep (I know, his lips where moving) told them that Marriott was looking at the possibility of spreading MF fee payments over the year by giving an option to pay out on a monthly schedule. MF are due right after Christmas and near tax time so it can be a lot of cash flow going out during this time of year.

Was wondering if anyone has heard of this as a possibility? If I could spread my MF out I would even consider maybe buying another resell. If not monthly, maybe pick to pay out a couple in Jan and then rest in June....

Of course I guess I could setup on my own to save monthly and payout from that bucket in Jan. Just wondering what others might have heard on this..

I haven't heard of this but it wouldn't surprise me if they offered it or even established it as normal business practice.

I am expecting changes now that Marriott Vacations Worldwide has to survive on its own as a seperate business entity and is accountable to its shareholders.

 

[dougp26364]

I already do this. It's just that I'm not giving my money to Marriott. I'm putting it in an interest bearing savings account. My employer allows me to set up automatic deposit into three seperate accounts. I multiply last years MF by 107%, divide that number by the number of paychecks in the year and have my employer deposit that amount into a savings account earmarked to pay timeshare MF's. It doesn't earn a lot of interest but, what I ususally see with developers who set up a monthly payment option is a charge of $2 or $3 to process each payment. So I save any fee Marriott might want to charge, earn a small amount of interest and, at the end of the year charge the entire bill to a CC that gives us rewards then pay it off with the money in the savings account.

Don't wait for Marriott to do it for you as they'll charge you for the priveledge. Just do it yourself by paying yourself and put the money into a savings account.

 

[curbysplace]

Marriott Streamside gives you the option to pay quarterly. My understanding is this is a decision of the HOA. I like the option.

 

[SueDonJ]

Marriott Streamside gives you the option to pay quarterly. My understanding is this is a decision of the HOA. I like the option.

If you choose the quarterly option do you end up paying anything extra for processing, or is it just the annual fee divided by four? Also, do you pay the current year's fees throughout the year or during the year prior? (Although I can't figure out how that would work if the Operating Budget isn't set until the end of the year?)

 

[wvacations]

I agree with the pay your self option. I do the same thing. I add 5% to my previous years MF for all 5 weeks, have it deducted from my paychecks automatically and sent to an Internet bank. I don't even have checks for that account! In January I pay all the MF's on my Marriott credit card, and earn 28,000 MRD points. I get the bill CC bill in febuary and pay it from the Internet bank in March. I never see the money and it makes vacations seem that much better!!

 

[SueDonJ]

Same here, we budget for the MF as well as Club Dues annual bills knowing they'll come due December/January, throw them both on the credit card for the mondo points and then pay it off immediately. But I'm interested in the costs to the HOA's for monthly/quarterly options - if it costs all the other owners anything more than what it already costs for annual processing, then I wouldn't want my resorts to offer the options unless the extra costs are paid only by those who use them.

 

[nokaoi9]

I really don't know why so many people think that paying monthly to MVCI, SVN, etc. is really any advantage. We simply set up a separate bank account and schedule monthly transfers to that account as if it is any other bill. We account for MF's with a 10% increase year over year, primary membership for II, secondary membership for II for being enrolled members, and a few hundred extra for possible trades.

Sorry if I am going off on a tangent, it just seems that there is so little personal accountability anymore. It should not be the responsibility of the timeshare companies to make it easier for people to pay their maintenance fees.

 

[FractionalTraveler]

I really don't know why so many people think that paying monthly to MVCI, SVN, etc. is really any advantage. We simply set up a separate bank account and schedule monthly transfers to that account as if it is any other bill. We account for MF's with a 10% increase year over year, primary membership for II, secondary membership for II for being enrolled members, and a few hundred extra for possible trades.

Sorry if I am going off on a tangent, it just seems that there is so little personal accountability anymore. It should not be the responsibility of the timeshare companies to make it easier for people to pay their maintenance fees.

Absolutely right except that you are looking at this from the wrong (customer) perspective.

I bet this option (if proposed) is not to give the customer more flexibility and options to pay. That already exists.

What this option would provide is for Marriott to have better cash flow as in monthly recurring income with less risk of a customer defaulting or paying late on the current yearly statement.

 

[Dolphin]

Absolutely right except that you are looking at this from the wrong (customer) perspective.

I bet this option (if proposed) is not to give the customer more flexibility and options to pay. That already exists.

What this option would provide is for Marriott to have better cash flow as in monthly recurring income with less risk of a customer defaulting or paying late on the current yearly statement.

I agree on personal responsibility and would not want others to pay for something I would take advantage of. But as FT pointed out as in the software and communications industries recurring revenue is plus to companies(take software support). Also it could minimize the defaulting of owners as pointed out, which would be good for everyone.

In fact if done right, it could be less costly to have self service to have it automatically come out of your account vs Marriott having mail with checks coming in to handle and process. For that matter save on mailing out of MF bills do all electronic.

 

[nokaoi9]

Agree with both posts.

If Marriott were to roll a monthly payment plan out for maintenance fees, I'm sure that they will charge a fee to do so. Also, I suppose I would be in favor of it if the end result was less people defaulting on their fees.

Cheers,
J

 

[dioxide45]

Paying Monthly Means Paying Early

If they were to set this up, you would pay your MF in January and then have to start on the monthly plan right away in February. They wouldn't likely let you pay following when it is normally do. I really don't want to give MVCI my money early if I don't have to.

We usually do something similar as everyone else, except we roll all of our vacation costs in to it. About a 18 months out I am able to forecast approximately how much we will need for our travels through the next 18 months or so. This includes all vacation costs (cruises, MFs, car rentals, airfare, food). I then cash flow it out and determine how much I need to put in a savings account each pay check to make sure the balance never goes below $0. I then set that up to go in to a separate account each pay check. So while the balance may get close to $0, I know it will be high enough come MF bill time to cover it.

 

[bogey21]

This could work for all concerned if set up with an automatic draft on my bank account. If I still owned a Marriott and if there was no service charge for the service, I would go for it unless I was planning to sell within the next 12 months.

George

 

[BocaBoy]

There is already an extra cost to the Association for allowing credit cards to be used. If one thinks an extra cost for a monthly payment option should be charged only to those who use it, shouldn't the same be true for using a credit card?

As a point of history, MVCI did not even allow the use of credit cards to pay maintenance fees in the very early years. By about 1990 they started allowing the use of credit cards. However, for the first several years there was a 2% or 3% discount for paying by check. This is effect charged the credit card users for the cost. This lasted a few years but by the mid-1990's (maybe a little earlier than that), the discount for not using a credit card was dropped, and the credit card costs were shared among all owners. I assume this was the case across the system, but I suppose it could have varied by resort. My information is based on our ownership at Sabal Palms in those years.

 

[dioxide45]

There is already an extra cost to the Association for allowing credit cards to be used. If one thinks an extra cost for a monthly payment option should be charged only to those who use it, shouldn't the same be true for using a credit card?

As a point of history, MVCI did not even allow the use of credit cards to pay maintenance fees in the very early years. By about 1990 they started allowing the use of credit cards. However, for the first several years there was a 2% or 3% discount for paying by check. This is effect charged the credit card users for the cost. This lasted a few years but by the mid-1990's (maybe a little earlier than that), the discount for not using a credit card was dropped, and the credit card costs were shared among all owners. I assume this was the case across the system, but I suppose it could have varied by resort. My information is based on our ownership at Sabal Palms in those years.

I think most properties have a line item in the HOA financials for Credit Card Fees. So all owners are sharing the costs associated for those that use credit cards to pay their MFs. I think there is a trade off with accepting credit cards, sure there are higher fees to accept them, but it perhaps keeps delinquencies down since people will pay by credit card if they don't have the cash on hand.

I can see how a monthly payment option can help many families to better budget their MF money. Not everyone has the flexibility throughout the year to set aside a certain amount to cover these fees when they come due. So coming up with all those funds right after Christmas may not always be easy. If offering a monthly option has a positive effect of reducing delinquencies, I am all for them offering this type of option.

 

[bogey21]

There is already an extra cost to the Association for allowing credit cards to be used. If one thinks an extra cost for a monthly payment option should be charged only to those who use it, shouldn't the same be true for using a credit card?

Good reason why monthly payments (if offered) should be set up as direct debit to checking only. That's the way one of my local utilities does it. For me it is painless and easy to follow just by checking my checking account website.

George

 

[floyddl]

It is always better to receive interest free (or low interest) financing than prepaying your dues into a savings account. While it isn't Marriott's responsibility to do this it certainly helps attract new owners who don't have the discipline or financial health to pay an annual lump sum. I think it would be a good marketing move that will attract more buyers.

 

[TheTimeTraveler]

It is always better to receive interest free (or low interest) financing than prepaying your dues into a savings account. While it isn't Marriott's responsibility to do this it certainly helps attract new owners who don't have the discipline or financial health to pay an annual lump sum. I think it would be a good marketing move that will attract more buyers.

I don't think it would attract more buyers, but I do think it would help make the existing owners pay their fees in a timely fashion.




.

 

[SueDonJ]

There is already an extra cost to the Association for allowing credit cards to be used. If one thinks an extra cost for a monthly payment option should be charged only to those who use it, shouldn't the same be true for using a credit card?

As a point of history, MVCI did not even allow the use of credit cards to pay maintenance fees in the very early years. By about 1990 they started allowing the use of credit cards. However, for the first several years there was a 2% or 3% discount for paying by check. This is effect charged the credit card users for the cost. This lasted a few years but by the mid-1990's (maybe a little earlier than that), the discount for not using a credit card was dropped, and the credit card costs were shared among all owners. I assume this was the case across the system, but I suppose it could have varied by resort. My information is based on our ownership at Sabal Palms in those years.

Isn't there some law or regulation that prohibits vendors from charging credit card processing fees to the card user, and that's why the discount for non-card payment had to be stopped? I vaguely remember from other similar TUG discussions that that's the reason the cost isn't applied to only those who charge their fees. For all I know, any monthly/quarterly processing fees would have to be picked up by the HOA's for the same reason?

 

[tjkahn]

Isn't there some law or regulation that prohibits vendors from charging credit card processing fees to the card user, and that's why the discount for non-card payment had to be stopped? I vaguely remember from other similar TUG discussions that that's the reason the cost isn't applied to only those who charge their fees. For all I know, any monthly/quarterly processing fees would have to be picked up by the HOA's for the same reason?

There's no law against providing a cash discount. When Marriott discontinued charging more to CC users, I'm sure they didn't waive the processing fee - they increased EVERYONE's fee by assuming everyone would use a credit card and charged maintenance fees accordingly.

It's a classic marketing ploy to make some folks think they're getting a discount. Like supermarket cards - the real price is the discounted price. That's why if you say you don't have your card with you, they swipe a card for you anyway. The folks that don't use a "discount" card pay more. The supermarket gets the same price because they're paid for the data the "discount" card collects.

Marriott probably doesn't incent paying cash for MF's because they want you to use your Marriott card...they get paid by Chase for the points you earn.

 

[dioxide45]

Isn't there some law or regulation that prohibits vendors from charging credit card processing fees to the card user, and that's why the discount for non-card payment had to be stopped? I vaguely remember from other similar TUG discussions that that's the reason the cost isn't applied to only those who charge their fees. For all I know, any monthly/quarterly processing fees would have to be picked up by the HOA's for the same reason?

Some credit card merchant agreements won't permit companies to charge a processing fee for credit card payments. They must provide the same price to someone paying cash as they do to someone using a credit card. It is part of the companies agreement with the credit card merchant (Visa, MC, etc). I think recent laws that have been passed have now negated that type of clause in those agreements though.

 

[rickandcindy23]

I pay MF's all through the year by reserving dates for next year well ahead, and paying the fees as I reserve each one.

It's my way of guaranteeing I get a great week reserved, while spreading the fees throughout the year.

Some months I do some extra money juggling.