In the next few months, many consumers could find that their local businesses have imposed minimum purchase amounts when they choose to pay with their credit card.
According to a report from Cleveland television station WEWS, the latest credit card reform laws included a provision that will stop credit card lenders from preventing businesses setting minimum purchase amounts. In the past, issuers didn’t allow these minimums so they could continue to make money from interchange fees, which could climb as high as 5 percent of the purchase price.
The report said that by establishing these minimums, businesses are able to offset the cost of these interchange fees. To make up for minimums, and to keep customers who prefer to take on credit card debt, businesses may also start offering discounts to customers who make their payments using cash or their debit cards.
If small businesses were not allowed to offset the cost of these interchange fees with minimums, or by raising prices, many say they would lose tens of thousands of dollars a year.