Many consumers may have been dismayed in recent weeks when they went into a local business and found that they could not use their credit card unless their total purchase met a minimum payment requirement. That may become a more popular trend in the coming months.
According to a report from Cleveland television station WEWS, though many credit card companies have prohibited merchants from imposing minimum payments in the past, the new financial reforms have made it illegal to continue that practice. Previously, lenders forced businesses to do without minimums because of the money they charged for interchange fees.
But the report said that the new rules are in place to protect businesses, some of which were making no profit at all on credit card purchases under a certain amount that varied by carrier. Some lenders charged up to 5 percent per transaction processed.
Credit card lenders and businesses have had a contentious relationship over interchange fees for years. Owners feel as though the rates they are charged to process credit card transactions are exorbitant, which is why Congress stepped in and limited issuers’ powers over them.