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Senior Contributor

Credit cards for farm use

How many of you use credit cards for farm use?  We use it if buying something over the phone or online, but not to buy crop or livestock inputs.  Guess I am having trouble fathoming the $36,000 feed bill I heard that had been paid with a credit card. 

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18 Replies
Senior Contributor

Re: Credit cards for farm use

Wow!  That would really rack up the rewards points.   I use my reward points to get gift cards that I give away for Christmas and etc. gifts. 

I HATE FARM PLAN.    We only use it when we run out of credit at the John Deere dealership.     

 

Like you we only use our credit card for phone orders where they want paid before delivery.   Shoup, Hog Slat, and an occasional other vender.       I'd need a bigger credit limit to buy my seed corn or that much feed. 

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Senior Contributor

Re: Credit cards for farm use

I wouldn't even want that much credit available on a credit card!  That is what banks are for!  We have seen someone that died with $30,000 on credit cards...not pretty!

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Veteran Contributor

Re: Credit cards for farm use

I used to have one that paid rewards in Savings Bonds.  I got quite a few by paying farm bills with the credit card.  I paid the card off monthly so there weren't any fees, but it is not a good practice if you aren't able to pay for it monthly.  Also, if you do that, you will get continuous bump ups in your credit limit.  Kind of scary how the whole system operates.

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Senior Contributor

Re: Credit cards for farm use

If you can have a card just for farm use, makes it easier to find the deductible expenses. Having all purchases on a single card is harder to keep things straight, especially if you use it for fuel for farm and non-farm vehicles.

The only time I used a credit card for a feed purchase I had to pay a 2% merchant fee. That's a lot of money if the bill was $36,000!

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Senior Contributor

Re: Credit cards for farm use

DH was using checks for paying for gas for farm truck at Casey's.  I got so sick & tired of all those checks & slips that I finally got him to use Discover, which we get a 5% credit (?) return on the card.  We also use it for some of the farm store purchases when we don't have the correct checkbook.  It's actually made my bookkeeping much easier because their is another verification and we always pay off monthly.  Can't imagine using it for feed.  Things must be pretty bad not to be able to get the bank for credit.  We know of a few dairy farms who have to pay in cash upfront for feed, semen & dairy repairs.  Things are not good on these farms and unfortunately there are more all the time.

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Advisor

Re: Credit cards for farm use

I use our business credit card for virtually all farm purchases, and many services like phones, electric bills, etc.  Paid off monthly. 

Our bank recently called and offered us a business card to serve as the overdraft protection account for the main farm account.  Have not ever needed it, but have always kept a decent overdraft credit line in place.  That cost a small annual loan fee, which we will save by switching to the card in its lace. 

My rationale for this automatic credit coverage is in case something happened to me, and it took Mike a while to get funds deposited over to the checking account where our health and farm policy draft monthly premiums.  I think that we could go several months without direct management, and still stay up and running...my peace-of-mind choice is that we would not suffer a lapse in health insurance if iI am out of commission administratively for  a while. 

It is interesting to see what your credit score is when you have tlo check it to opena new account like this new card.  Since Mike and I are equal partners in this operation, the bank had to run us both through Equifax to open the new account.  They say people start to look alike after a lot of years together...and for us, that is at least true on our credit rating...our scores were identical. 

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Senior Contributor

Re: Credit cards for farm use

Speaking of credit scores, my score was always very high, but it dropped several points after I paid off a card used to finance a tax bill.  It should have gone up.

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Senior Contributor

Re: Credit cards for farm use

Credit scores do rise when a credit card is dropped. Crazy..

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Senior Contributor

Re: Credit cards for farm use

A good plan. Several years ago while I was working as an agent, I heard a sad story. The husband paid all the bills and had never taught the wife to even write a check. He was hospitalized and when the insurance bills came to pay for long term care and other medical insurance premium she did nothing and the insurance was gone just when it was needed.

In another case, the couple had two accident policies with the same company. The wife died and when the second premium due notice came the husband thought it was the same policy and did not pay. A few weeks later, he had a bad accident and could have used the insurance.

I have tried to share the paper work here and explain it but it hasn't worked too well. Auto deductions do help.

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