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Wednesday, May 11, 2011

visa/mastercard minimums, surcharges illegal




yesterday, i asked the dq clerk if i could use a credit card to buy a mocha milkshake, and what the minimum charge was.

"minimum amounts  to use a credit card are illegal, as are surcharges(fees)."

this led me to the following informative website.
i thought you would like to know.





Many merchants engraft their own rules to your use of a credit card, usually without the right to do so. What are you required to do and what can you rightfully refuse to do? The Financial Guide explains your rights................



MERCHANT CREDIT CARD ABUSES:What They Cannot Ask You To Do

MINIMUM CHARGE REQUIREMENTS

Some stores require consumers to spend at least $20 (or some other minimum) to pay for purchases by credit card. They engage in this practice because they and their banks do not want the expense of processing a credit card transaction involving a small amount of money.

This practice defeats one of the major purposes of credit cards—convenience—and may force credit card users to spend more than they want to. In addition, minimum charge requirements vary from merchant to merchant, and there are no regulations requiring disclosure of these minimum purchase levels.

Visa's and MasterCard's regulations prohibit minimum charge amounts. American Express's regulations do not explicitly prohibit minimum charges, but its policy is to discourage any merchant practices that create a "barrier to acceptance." Amex does prohibit "discrimination" against the Amex card, however, so if a merchant has no minimum charge for Visa and MasterCard, the merchant may not discriminate against Amex by imposing a minimum charge.



EXTRA CHARGE FOR USING A CREDIT CARD

Some merchants seek to impose a service fee for all credit card purchases.

When a merchant gives a credit card slip to the credit card company or bank for processing, a percentage of each purchase—usually 1.5% to 5% of the purchase amount—is deducted. This "merchant discount fee" helps pay for the bank's services and for the credit card system. By charging extra for credit card use, the merchant passes the discount fee on to customers.
MOREMORE: Since 1984, when a Truth in Lending law ban on surcharges expired, some states have enacted laws prohibiting surcharges; see States That Prohibit Credit Card Surcharges.

Visa and MasterCard prohibit surcharges, and American Express discourages them. Amex does prohibit "discrimination" against the Amex card, however, so if a merchant accepts Visa and MasterCard (and cannot impose a surcharge under those companies' rules), the merchant may not discriminate against Amex by imposing a surcharge.
Many merchants engraft their own rules to your use of a credit card, usually without the right to do so. What are you required to do and what can you rightfully refuse to do? The Financial Guide explains your rights................



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