Is it legal for businesses to impose a minimum on credit card orders?

Question

I heard somewhere that they have an agreement with the credit card companies that bar them from imposing limits. Is this true?

Answer 1

You know? I could not find ANY information on whether or not it is illegal for a CREDIT CARD CO. to impose a min. spending limit.

However, it IS illegal for merchants. They are breaching their contract(s) with the credit card(s) company(s). Which, I'm sure, they'll get penalized for, the merchants, if and when you report them to the credit card company.

The reason some merchants try to impose a minimum spending limit is that they're charged a small fee for every transaction; a certain, and specific, amount, no matter how small or large the transaction amount is.

So, let's say you buy a .25 pack of gum, they'll probably be charged for a dollar's worth of purchase, and will end up having to pay for your gum in the end. Meaning, they'll not be making a profit off of it. You lose money. Credit card gains money. Merchants lose a lot more money than you did in the end.

Regardless, its still illegal for them to set a min. amt.

As for answering your specific Q, if it doesn't get answered on here, there are gov't sites about credit and credit cards, I'm sure you can find the answer there.

Answer 2

of course...there's a cost associated with them fulfill orders too..this helps them out.

Answer 3

VISA and MC cannot do this.

They can offer a cash discount though.

Answer 4

Not Illegal but against the terms and conditions between credit card issuers and merchants. Depending on what credit card issuer you have you should be able to complain.

Good luck

Answer 5

For every cc transaction a business pays merchant services aka the processor a percentage of the transaction on top of that the business pays a "use" fee for every transaction so I would say it only makes sense not to accept cc's for transactions under $5.00 if not they are giving merchandise to you free.  Some companies will charge for use of a cc under $5.00 also.  makes sense to me, if you are spending a $1.00 search through your purse, I'm sure you will find enough spare change .. lol

As far as legalities I'm sure it is, too many companies do it.

Answer 6

Where are you?

Answer 7

It is not illegal. However, if you report them to the CC they will lose the ability to accept those CCs. It is OK, under the terms of the CC agreements, to offer a cash discount that is less than the posted price.