Question: Is It Legal To Pass On Credit Card Charges?

All merchants are allowed to charge their customers a convenience fee for using a credit card if the customer is using a non-customary payment channel.

The practice of always charging customers a fee for credit card payments, no matter how the transaction takes place, is called a surcharge.

The short answer is yes. Starting in 2013, it became legal to charge customers extra for using a credit card. Retailers can also require a minimum purchase amount when you use credit cards. But merchants need to follow specific rules when adding credit card surcharges.

What states is it illegal to charge extra for credit card?

Eleven states—California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas—and Puerto Rico have laws that prohibit merchants from charging consumers with surcharges on credit card transactions.

Are credit card minimums illegal?

Minimum-purchase requirements for credit cards are allowed, up to $10. Merchants can set minimums for credit card purchases, as a result of a lawsuit merchants won against credit card companies and banks.

Convenience fees and surcharges are legal, as long as they stay under a certain percentage of the purchase price and aren’t assessed in a state that bans them.

Can businesses pass on credit card fees?

Under a court settlement that went into effect in January 2013, retailers in many states are allowed to add a surcharge to credit (but not debit) card payments made by Visa and Mastercard. Currently, merchants can pass along fees in the form of a surcharge equal to what they pay to accept the card, up to 4 percent.

Can I add credit card fees to customers?

No surcharge can be applied to debit card transactions. Merchants can pass the same fee onto customers that they pay the card network per transaction. This battle, however, is an ongoing fight among merchant groups and credit card networks so these rules may change in the future.

Do all gas stations charge more for credit cards?

So, yes, gas stations (and all other retailers) are permitted to charge you extra for using a credit card.

What’s this charge on my credit card?

In many cases, a mysterious charge on your credit card statement is a mistake made by the merchant. If you find that a purchase you made is showing up as a different amount than what’s on your receipt, contact the merchant immediately. With a proof of receipt, they should be able to fix the charge.

Can merchant charge extra for credit cards?

The charge is what merchants are supposed to pay to banks for the card payment infrastructure used for the transactions. ET looks into the details around the charge and why is it that customers end up paying 2% extra on card payments at some retail outlets. 1. Cards can be of two major types, debit and credit.

Why do stores have credit card minimums?

Minimum Credit Card Charges under the Law

In addition to the law, banks frown on the practice of minimums because they collect the fees for the credit cards charges: merchants imposing a minimum loses transaction fee revenue that goes to the banks.

Should I use my credit card for all purchases?

You should always have a purpose, such as paying your phone bill, buying groceries, or fueling your car. Only use your credit card on planned purchases you can afford. Every month, pay off your balance. View your credit card as a tool and avoid getting into debt, and you might be surprised at the financial benefits.

Can small businesses charge for card payments?

This meant that they could charge customers what it costs the business to process the debit or credit card payment. As of the 13th January 2018, businesses can now no longer charge their customers for choosing to pay by card, whether that’s online or inside your store.