A Tale of Two Diners

Yesterday I described the virtues of the current Diners Club deal. Today, compare two diners at Bice (pronounced “beach-A”) on Miami Beach (a spin-off of the same restaurant in midtown Manhattan).

One diner folds his napkin neatly and pays the $80 bill with a plain old Visa card on which he perennially runs a balance. It costs him $80, including tax and tip — plus 18% interest that begins accruing right away. Because this guy, like so many millions of Visa holders, makes just the minimum payment each month, he’ll be paying interest on this meal for years. Net net: “dinner for $80 plus 18%.”

The other diner hands the waiter his Diners Club card. He, too, pays $80, but will have an average of 75 days or so before any late fees would accrue. (His bill comes once a month, but this charge is as likely to have been at the beginning of the month as at the end, so it’s an average of 15 days old even before he gets his bill — and then he has up to 60 days or so to pay it.)

Having 75 days’ free float is a gift worth at least 1% to most people.

And, far from having to pay an extra 18% in interest, because Bice happens to be one of the restaurants participating in the Diners discount program, this second diner will automatically get 20% off.

And he’ll earn frequent flier miles on the 80% he does have to pay, which themselves are worth at least 2 cents each to him — another 2% or so. So all told, he gets “dinner for $80 less 23%.”

Get it? Dinner can carry an 18% surcharge or a 23% discount.

Not that going out to expensive restaurants is a good way to save money no matter how you slice it. But for those who do, that’s quite a swing.

Tomorrow: A Few More Diners Club Pros and Cons