Law now allows $10 minimum purchase for credit cards, not debit cards

I am seeing a lot of older threads here that say you can't set a minimum for credit card transactions without violating your agreement with the processor.
 
The recent new bank regulations now make it illegal for processors / banks to have or enforce such contract clauses for Credit Card transactions.  Debit cards are exempted.
 
You can, by law, post a sign and enforce a minimum of up to $10 for credit card transactions.
 
Here is an article on the topic that references the new law.
   w w w .crownheights.info/index.php?itemid=30070

That's a shame.  With every bill signed into law, a little bit of liberty dies.  In this case, private contracts.  And the consumer has to bend over and take it.  Thanks for posting, will check it out.  I'm a card merchant, and this information hasn't been disbursed by any of the cards, to my knowledge.  I wonder if there's any provision regarding the sinister practices of surcharges or requiring ID. 

MellowRoast


That's a shame.  With every bill signed into law, a little bit of liberty dies.  In this case, private contracts.  And the consumer has to bend over and take it.  Thanks for posting, will check it out.  I'm a card merchant, and this information hasn't been disbursed by any of the cards, to my knowledge.  I wonder if there's any provision regarding the sinister practices of surcharges or requiring ID. 

 
I'm not a lawyer but I believe "private contracts" made under circumstances in which one party has all the power may not even be enforceable.  Even if legal, that would seem to be the case in a contract between a small business person and the likes of Visa and Mastercard.  Depending on the nature of the small business, you are suggesting there is actually a valid option not to accept credit cards at all.  Not really.  Not if your business is other than a hobby.  And that means accepting whatever terms the big servicers demand, UNLESS the government intervenes on your behalf to even the playing field a little.
 
This new law would not seem to require anyone to do anything but it does allow small businesses to decline credit cards for purchases in which the card services fees would eat up a big chunk of the margin.  That sounds like increasing "liberty" to me.

it's part of the (federal) credit card overhaul bill - went into effect in july 2010.  being federal, it supercedes any local laws if the local laws are of a lesser nature, afaik.
 
by agreeing to accept visa/mc, you agree (as per the contract with your provider) that you will accept EVERY charge proferred both debit and credit - there's nothing in the federal law to enable you to bypass that.  so, if someone wants to buy a can of soda or a pack of gum and use their debit card, you have to allow them to.  if you refuse, they can report you  - and being reported opens you to fines and having your service provider cut you off as well as visa/mc/etc refusing to allow you to do business with them in the future (via a different pos provider).
 
what i don't understand about it is why the fed is allowing minimum purchase requirements for credit purchases  - previously, that was not allowed per visa & mc (it was in the contract you signed).  even with lower amounts, it still makes sense to take the loss on the fees because it's either a lower sale or no sale at all!  not everyone has a debit card to be able to use that to get around a minimum charge fee, either.  so, i see people losing sales.

joclyn
 

what i don't understand about it is why the fed is allowing minimum purchase requirements for credit purchases  - previously, that was not allowed per visa & mc (it was in the contract you signed).  even with lower amounts, it still makes sense to take the loss on the fees because it's either a lower sale or no sale at all!  not everyone has a debit card to be able to use that to get around a minimum charge fee, either.  so, i see people losing sales. 

 
 
My guess is it's because the law strictly limits fees the credit card companies can charge on debit cards (so strictly they are screaming bloodly murder) but not on credit cards.  With fees now decently low on debit cards, there's less reason to begrudge the companies a few cents per transaction, even on a small transaction (although I personally still think this should be up to the merchant).  Credit card fees are much larger, still.  They can totally eat up the profit on small transactions.
 
If the credit card companies are so concerned about the public and all, they should make use of cards free to the merchant (fat chance!).

that's a sham... the agreement is NOT with the processor, it's with Visa, etc. You can not put a limit on a credit card to process. You must accept 1.00 purchase, typically you can get away with a minimum until a visa rep (ETC) walk up and you enforcei t on them. HIGHLY unlikey scenario though.
 
I spent many of years in that industry up until dec 09 It's not an enforceable bank law, that would only pertain to debit, NOT credit unless it's a private card like home depot, which would be concidered a charge card,

uummm.....how about charging an "ATM" fee for all card purchases..... but then waiving that fee for any orders over 10 bucks......
 
almost every small mom and pop store around my part of the country has a minimum to use a card....... ranges from 3-10 dollars......and they have had these signs up for as long as i can remember.....
i dont blame them.....why in the hell would i want to, or anyone for that matter, pay visa a 35 cent fee on a pack of gum i am only making 50 cents off of.... they already charge for the batch fee at the end of the day, its all electronic, theres no added labor if you make 1 sale or 10, so other then we have no choice if we want to accept cards, there really isnt a need for the per transaction fees that i can see