The Legality of Credit Card Minimums/Maximums

With a dazzling headline like that, how could you not read this entire article? All kidding aside, I contributed research to this article which was primarily written by Townsman reporter Julie Balise. It was originally published in the July 14th issue of The Wellesley Townsman.

 Laws surrounding the use of credit cards can be quite murky. Photo courtesy Flickr.

WELLESLEY, Mass. - - It’s been a year since the nation’s leaders approved a sweeping financial overhaul bill aimed at improving the country’s fiscal stability. One change prevents credit card networks from inhibiting merchants’ ability to set minimum or maximum purchase requirements.

Known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, the nearly 900-page law includes sections on financial stability, real estate, hedge funds and credit cards. One change applying to credit card networks prevents them from setting minimum or maximum purchase requirements.

Minimum purchase requirements cannot differentiate between credit card issuers and must not exceed $10, according to the act.

Previously, credit card issuers prohibited merchants from setting such minimums or passing transaction fees onto customers.

A Townsman survey of 13 Wellesley shops showed that many continue to abide by the old regulations. Eleven did not implement a minimum charge requirement for credit cards. One required a $10 purchase, and stated so on a sign. Another required a $5 purchase.

Quebrada Baking Co. of Wellesley Hills tried to implement a minimum purchase requirement years ago, said Catering and Events Manager Katy Curtin. The minimum upset a lot of people, she said, and appeared to be in violation of credit card regulations.

Eliminating the requirement has worked well for them.

“We’re a small business and we were trying to expedite things,” she said. “It’s more expeditious to just to take the card no matter the amount.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act’s section allowing merchants to use credit card minimums appears on page 698 within section 1075.

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