Know Your Consumer Rights: Credit Card Minimums and Fees

By Spicer Matthews

I hate cash. I think most people do. Life is much simpler in a paperless world. But I don’t love plastic, either—I am looking forward to Bitcoin taking over the world. Until Bitcoin is a household name, however, credit and debit cards are the next best thing. With a few caveats: some merchants only accept credit cards for values greater than a certain amount. And some merchants charge you a fee for using your credit card (it might not hurt, but it does sting). What many of these merchants do not know is that they are in violation of the law and credit card network rules.

Minimum Purchase Maximum

Thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which went into effect in 2010, merchants that accept credit cards can legally impose a $10 minimum on credit card charges. However, they must impose it on all cards (not just American Express, for example). For more information check out the article Merchants May Require Up to $10 Minimum Credit Card Purchase. And the next time you encounter a minimum of more than $10 raise a stink with the merchant. I do.

Checkout Fee Limits

In 2013 the credit card networks set a limit to the checkout fee a merchant can charge. Has a merchant ever charged you 50 cents for using your credit card to buy a soda? Unless you were buying a $12 soda, that charge was against the rules. The limit to how much a merchant can charge is typically around 4% (0% in at least 10 states). For more information read this great article: Checkout Fee: Charging Credit Card Fees to Customers. Don’t let merchants overcharge you for using your credit card.

Why Do I Care?

So why am I taking the time to write about this issue? I always feel a little cheated when I am charged a fee for using a convenient form of payment, and I want to encourage merchants to find more creative ways to offset the cost of accepting credit cards. For example, a coffee shop I used to frequent allowed me to run a monthly tab. The merchant saved money by having only one credit card transaction for me each month rather than many. And I enjoyed the convenience of not having to pull out my wallet for every cup of joe. It was kind of like walking into my mom’s kitchen.

I hope this post helps persuade merchants to change their policies to comply with the current laws and rules. And I hope that customers stop giving in to excessive credit card minimums and exorbitant checkout fees.