Financial Reform Bill Oks Minimum, Maximum Credit Charges

The financial reform compromise may keep our financial system from reprising Chernobyl anytime soon, but it will also change the way consumers use their credit cards. Merchants will soon be allowed to refuse plastic for purchases of less than $10, a rate the Fed can boost as they see fit. Both the Fed and universities will also gain the power to set maximum credit charges. That means no more free flights to Europe after charging your kid’s tuition to your rewards card. The changes will go into effect the day after the compromise is signed into law.

Wave of New Rules to Protect Consumers [The New York Times]
Dodd-Frank Wall Street Reform And Consumer Protection Act [House Committee on Financial Services] (Title X, Sec. 920(b)(3)(A)(i)(II))

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  1. Eyebrows McGee (now with double the baby!) says:

    As long as I can still buy a car on plastic.

    • sleze69 says:

      The lower limit is gonna really affect me. I use my card for EVERYTHING.

      • Griking says:

        I’m all for minimum charges personally.

        If you walk into a convenience store and purchase a Coke with a credit card the owner is probably paying more the process the charge then he made on the Coke that he sold you.

        It’s not that unreasonable to carry a $20 on you.

  2. whosyer12 says:

    How come when new legislation even slightly favors the consumer–it takes 1 1/2 years to go into effect (giving the institution time to murder us in the tween) –but when we’re getting boned up the ass, its “the day after the legislation is signed” ??

  3. bellabell says:

    we are not the ones paying their “salaries”. their government pay every month is welfare to them. all the perks, gifts, etc are what matters to them along with the power. until they remember that laws are “we the people” not “we the corporation” nothing will change.

    this new agency already does not address car dealers and it will only be a matter of time before another entity is excluded. i see nothing going for us here yet….

    • BluePlastic says:

      They will never “remember” on their own because it’s just too lucrative for all involved, and there doesn’t seem to be anything “we the people” can do to remind them.

      • Eat The Rich -They are fat and succulent says:

        Don’t vote for them? That is a start.

        • Groanan says:

          The problem is that the position can only be obtained by those with money and wealth and a desire for power.

          Campaign finance reform and the removal of the two-party system (idk how unless force the final runoff to be between five candidates) is the only way we will ever get past this.

          • Dondegroovily says:

            We have 100 votes (not people) in the House of Representatives. All candidates are on a single ballot. The percent of votes received is the number of votes they get in the house. This means that only a 3% margin is required to have a voice in Congress – something the Greens and Libertarians can easily pull off, as well as other third parties.

  4. Sorta Kinda Lucky Soul says:

    Wow, I sure feel safer now since another multi-billion dollar government agency has been created.You just know good things will come from this, right? Right???

  5. APFPilot says:

    How is this a good thing? I don’t like to carry cash, and rarely do. I also have a company card that I use for expenses and now I am going to have to come out of pocket if i want to grab a coke at the airport?

    • tbax929 says:

      I agree. I’m hopeful that just because they’re allowed to impose that minimum doesn’t mean they will.

    • Awesome McAwesomeness says:

      Hopefully the free market will take care of this. Businesses who refuse to accept card purchases for less than $10 will probably lose business.

      • phrekyos says:

        They’ll certainly lose mine.

      • LafinJack says:

        HA HA HA HA HA HA HA

        Good one.

      • andrewbecks says:

        I couldn’t agree more. I can’t imagine carrying cash for small purchases and simply will avoid merchants that don’t accept cards for small purchases?

        As an aside, how does this help consumers? If you ask me, this is awful and unnecessary.

        • tootberg@spam.la says:

          Well, it remains to be seen what the ultimate effects are but this will give businesses the freedom to lower their costs since they no longer have to pad their prices to offset the fees and cuts the merchant processors take when accepting credit cards.

          • Nigerian prince looking for business partner says:

            I’m worried it will just increase costs in the end. Cash transactions still cost money (counting money, giving out change, holding up lines, storage, transportation, etc.) but it’s less visible than a credit card processing fee.

            • the_wiggle says:

              let’s not forget the real risks to staff due to the larger amounts of cash on hand.

              way to screw everyone Congress.

    • Julia789 says:

      Yeah the hundreds of individual expense report lines and receipt tracking I will have to process, if small travel purchases and single-person lunches now have to be paid with cash. I love the corporate card for expense tracking purposes.

      • Tim says:

        You don’t need to save your receipts? Everywhere I’ve ever worked has required receipts; credit card statements are never acceptable.

        • Nigerian prince looking for business partner says:

          That’s how it is for me too. I can’t imagine an auditor being happy with a credit card invoice as a proof of purchase.

      • Doughbuy says:

        Don’t need to send receipts in for anything less than $25 on my company travel card.

        On my company purchasing cards, If I spend less than $10 I’m doing things wrong. Tools and equipment usually runs me in the hundreds…

    • Nigerian prince looking for business partner says:

      I’m in a similar situation. Requesting petty cash is a pain, as is reimbursements. If I’m on the road, it’s a lot easier to just charge lunch or random supplies to my company card.

  6. tbax929 says:

    I’m not a fan of the $10 minimum for charges. I don’t carry cash and use my card for everything. Since I’m only buying for one, many of my purchases are for less than $10.

    • Awesome McAwesomeness says:

      I don’t carry cash either but am willing to start. I am all for giving freedom to business owners. They should have a right to make that decision if they lose a lot of money on fees.

      • Commenter24 says:

        Business owners already have freedom. They aren’t obligated to enter a contract with card merchant that requires them to not set a CC minimum. This is nothing but govt. meddling so that businesses can have their cake and eat it too.

        • ghostfire says:

          There isn’t, as far as I’ve been able to find, any merchant agreement that allows you to have a minimum charge. It’s either not accept credit cards at all, or take them $1, $0.50, or even a penny. There are plenty of credit card processing services out there, but Visa and Mastercard themselves both prohibit a minimum charge, and AMEX does not allow a minimum charge if you also accept other cards that don’t allow them.

        • Randell says:

          They are actually required to sign the contract from Visa, Mastercard and AMEX if they wish to accept credit cards. In case you missed it, they operate as a monopoly. They make sure they get their money BEFORE the merchant does. So lets pretend there is a 30 cent purchase. The merchant pays a mandatory transaction fee PLUS a percentage of the sale. It may cost them say $1. As a business, I am not allowed to say no, I won’t accept you costing me money. Forcing me to raise prices.

      • tbax929 says:

        This isn’t about freedom for business owners. Wow, I can’t believe you think it is.

        • ghostfire says:

          How is this not, at least in part, about freedom for business owners? It gives them an option that previously was unavailable despite tremendous demand for it.

  7. Awesome McAwesomeness says:

    Good. Consumers need to change the way they use credit cards.Too bad we need the government to force people to make those changes because people apparently refuse to control themselves.

    • BluePlastic says:

      Not sure how a minimum charge “helps” consumers. Perhaps the maximum charge would, but IMO the minimum charge just makes things more inconvenient and the only benefit is to the business.

    • evnmorlo says:

      Yeah, consumers needed to be forced to increase the profits of mom-and-pop retailers like Walmart and CVS.

      • ghostfire says:

        As someone who owns a tiny business, being forced to take a credit card for something that’s only $1, just because I carry things that are $40 or $50, means I lose money on that sale. The bigger the business, the better rates they get for their CC transactions, so this change helps small businesses a lot.

        • UltimateOutsider says:

          It’s unfortunate how the credit card processors set up their fee structure, I will grant that. The thing is, if a customer gets annoyed that she can’t use her credit card on a small purchase, there’s an increased chance that she will NEVER return to that particular business. That seems like a much bigger long-term concern than a few cents lost on a cheap transaction. As someone who hasn’t written a check in 3 years, and gets cash out of an ATM maybe once every 2 months, I actively avoid places that give me flak over credit card purchases… oh and I have American Express as well. I won’t shop anywhere that doesn’t take it unless there’s no alternative.

          • ghostfire says:

            So is my solution to stop selling inexpensive items, raise the prices over the competition’s, or stop taking credit cards entirely?

            • Sam2k says:

              You have chosen to engage in a business activity that opens you to the risk of loss. Deal with it or move on. The fact that you have chosen to sell something cheaply doesn’t mean that the rules should be changed to favor your profits over my convenience or vice versa. Government has no right to regulate something like this.

              • ghostfire says:

                *ahem* My losses over your convenience, if you read my comment. Should I be forced to sell to you at a loss? If not, please pick one of those options I offered, or show me a credit card processing system which allows me the freedom to have a minimum charge and keep within my contract. The free market has not produced such a thing, to the best of my knowledge.

                • frank64 says:

                  Yes, he doesn’t care about you. He is saying you need to eat the loss! Tough luck.

                  The free market didn’t develop the product you want because the free market isn’t involved. They are a near monopoly developed by the banks to handle the transactions(they have since spun it off into a public corp). In these times you need to accept cards and you need to just accept what they offer. I believe in the free market and I believe this change will be a giant step towards it.

                • menty666 says:

                  I own a small business too, and I hate the credit card fees as much as you do.

                  However, I know that if I’m somewhere that I have a choice between making a purchase from two people who have a similar item, and my option is use my card with vendor A or use the ATM which charges me 3.00 in fees and then I get nailed with another 3.00 in fees just to make you happy because you only take cash….I’m going to go to the guy with the credit card option.

                  You need to remember that yes,it’s a $1 purchase and you probably got bitten for 38 cents on that and yes, it sucks the big one. But the customer you get a $1 purchase from today may very well come back for $200 tomorrow. I had one customer who bought an 11.00 item from me, then sought me out *6 months later* with an order for $280 AND brought me her neighbor who placed a similar order.

                  It’s an irritating cost of business, but in the long run it’s one that can certainly pay off.

                  I fall into the camp that uses my debit card more than cash because it’s just a royal pain to deal with cash when money’s all electronic these days anyway. So yes, when I go to McDonalds and buy an ice tea with my debit card, they get nailed with fees. But in a few days when I need lunch and I have a choice between going to McDonald’s and putting 6.00 on my debit card or making an extra stop just to placate another restaurant owner who refuses to accept cards for whatever reason, I’m in a hurry and the card friendly business wins.

                  • Nigerian prince looking for business partner says:

                    It’s an interesting point about McDonalds. In my area they actively encourage customer to use debit/credit cards in their advertisements, especially in the drive throughs. It seems like they’d rather eat the transaction costs, in order to keep the traffic flowing.

                • Sam2k says:

                  If you had read MY comment, it is your choice to engage in such an activity. Presumably, you knew the rules when you entered the business. So either stop the activity, accept the loses, or get creative. Either way, it’s YOUR choice. Plus, I don’t believe the Merchant Agreement prohibits you from explaining the situation to your customer and asking them to pay with cash while still allowing them to pay by credit if they so choose.

                  • ghostfire says:

                    So your answer is stop taking credit cards or get out of business?

                    • AnthonyC says:

                      Don’t forget options 3 and 4: change the rules to give yourself more options (like the new law will), or break the rules and don’t honor the terms of your merchant agreement.

                      Breaking a contract may carry penalties, but it isn’t illegal. I certainly wouldn’t consider it a moral obligation even if it were illegal. The worst the card companies can do is refuse to let you accepts credit cards, and frankly, that seems unlikely, because very few customers would actually report you for having a minimum charge.

                      But if you’ve already decided to leave the rules as they are, follow those rules, and make use of a service provided by Visa, Mastercard, and AmEx? Then yes, you can either live with not having a minimum charge, stop accepting credit cards, or go out of business.

                    • Sam2k says:

                      My answer is for YOU to figure out a solution that works for you. Just don’t ask the rest of the country to adapt for your convenience.

            • jamar0303 says:

              Those concerns become infinitesimal when you get a string of fake large-value bills… That’s what happened where I am now, such that most retailers don’t so much as bat an eyelid when I pay with Discover for a US$0.40-something purchase. Better that than to lose a bunch of real money along with eating the value of that fake bill.

              • ghostfire says:

                Thankfully I haven’t had to deal with any counterfeiting issues yet. My business is extremely low risk for that kind of thing, so if I did get a bad bill it’d likely be something someone passed on unknowingly.

            • Nigerian prince looking for business partner says:

              What about explaining the situation to customers when they try to make a $3 purchase on a credit card? I think most people would be very sympathetic for a local business.

        • DangerMouth says:

          As someone else who owns a tiny business, I totally agree. As it stands, I would rather lose the occaisional customer, rather than be forced to accept a minimun sale that doesn’t make financial sense for us.

          We have a $25 minimum for internet (shipped) sales. And in person, we require an ID. In 17 years we haven’t gotten a complaint, but if it happens, we’d be willing to drop the CC rather than allow ourselves to be held hostage to the CC company’s terms (99 cases out of a hundred, the CC company will side with the consumer, regardless of whom is in the ‘right’). As it is, we’ve been able to deflect most claims: Your 16YO took your CC and ordered a $1200 item from us? Well, we have his sig and ID, but if this is actually his dad’s card, he can return it for a refund (minus shipping), or you can pay it, but you can’t keep the item AND expect us to accept the chargeback.

          I know a $1200 item is way different than a minimum sale, but the intent is the same: to tell a retailer what risks they should take.

    • captadam says:

      I use my credit card as I use cash: I put my purchases on it and then pay it off it full. Why do I need to be forced to change the way I make my purchases? After all, I am paid through direct deposit, and I have no ATMs near me from which I can withdraw cash without a fee. So, I have to pay money to get access to MY MONEY. I’d rather instead use a credit card for my purchases, large and small. I’m not the one who set up the cashless system. I’m just a part of it, rather I like it or not.

    • fsnuffer says:

      I don’t need you or anyone else telling me what is “good”

  8. Commenter24 says:

    This is nothing but unnecessary government meddling in private business. Business owners have all the protection they need in the form of freedom to contract (i.e., businesses don’t have to take credit cards). This provision is not good for consumers; it’s a protectionist measure to shield small businesses from the big, bad free market where they know they can’t compete with their high prices and ridiculous policies.

    • Eat The Rich -They are fat and succulent says:

      Thanks Rush!

    • areaman says:

      First I have to say I’m a small stake holder in Visa.

      With that said, I think Commenter24 is spot on. A small business can do well without signing up to do business with credit card companies. The middle ground would be if they only took debit cards. Lobbying by packing their cause with the cause of preventing financial meltdowns… that’s going overboard.

  9. xdreamwalker says:

    Does anyone think Walmart or any other large business, in my area Meijer, are going to actually implement at $10 minimum?

    Small business are going to have a $10 minimum and will end up losing customers.

    • hypochondriac says:

      Most small place near me already have a minimum charge. It’s against CC policy but they do it anyway. I’m kind of glad a minimum is now allowed. I use my cc for almost everything but always carry a bucks cash on me just in case.

    • tbax929 says:

      They already are, and I’m tired of people blaming Walmart for that. If a small business offered the selection and prices I can get at Walmart, Target, etc., I’d be happy to shop there.

      Instead (at least in my areas), I find stores that are unclean, groceries that are out of stock, and prices that are ridiculously high.

  10. ShreeThunderbird says:

    Many people no longer carry cash in favor of plastic for small purchases. I can see the $10.00 minimum limit on credit cards becoming a boon for muggers. At least someone other than Visa and Mastercard will benefit.

    • Grabraham says:

      I wonder if the small business will mind losing sales if the business they are losing are sales that cost them money ?

      • frank64 says:

        Yes, everyone saying they won’t be buying from them is fine for the merchants. They don’t like selling at a loss or near loss. The main thing though is the vast majority of consumers understand the issue and are OK with this.

      • Sam2k says:

        This. If a business (of any size) needs a customer to pay cash for a small amount in order to come out ahead, then they probably should not be making that sale in the first place.

    • partofme says:

      Uh, a $10 minimum limit means you have to carry a $10 bill on you. Maybe a $20, if you’re thinking you might make two purchases. Hardly a “boon”. Sure, it makes the low side a little sweeter. But really, all a mugger wants is the percentages to work out so once in a while they get the guy with a load of cash, a rolex, and an iphone.

  11. captadam says:

    Well, this kind of slaps the starry-eyed futurists who proclaim a cashless society upside the head.

    … I charge all gasoline, grocery, and restaurant charges to one credit card and then pay it in full. That means a $5 sub at Subway goes onto the card. This will change my habits–but will probably just mean no more of those smaller purchases for me, since I won’t have the cash on hand to pay for it.

    • Megalomania says:

      The problem is that interchange fees incorporate both a flat and percent fee, both of which are disproportionate to what’s being done by the company charging them. The percent fee

      • captadam says:

        A better law would cap the total fees charged on any credit card transaction to a certain (lower) percentage. Or it would combine the legal minimum with a cap on (or dissolution of) ATM fees. But, of course, there are always unintended consequences to any action–and of these actions could potentially hurt all of us through increased fees elsewhere and restrictions on methods for accessing cash and making purchases.

        • frank64 says:

          I don’t think price controls are the best. I like what they are doing, not forcing the merchants who really must accept cards, to accept them when they don’t want to. Some of these transactions are unprofitable. Because banks and merchants want us to use the cards, it should mean lower prices. I am hoping the banks lower some of the fees, especially on the smaller sales, so there will be less need for merchants to have minimums. Even if they don’t, the law is supposed to have provisions for the merchant to offer a discount, so we will be able to chose to save by paying cash. This should also help to lower fees.

          • AnthonyC says:

            Price controls are quite appropriate for a decidedly un-free market.

            It isn’t feasible to expect new competition to arise in the credit card market; we’re stuck with 4 major providers, and they each have knowledge of the others’ pricing.

            Many other countries do limit transaction fees. They’re still making a profit in australia at .5%, apparantly. So why does the US need to pay 2%?

    • taney71 says:

      Same for me. I don’t carry cash normally so if there is a min. charge I just walk away.

  12. OnePumpChump says:

    Excuse me, what?

    When I was an undergraduate (10 years ago when you didn’t have to sign your life away to go to school) I always put my tuition on my credit card because it was the least hassle to do it that way. One semester, I carried that balance one month because I didn’t have the money at the time, but knew it was coming. I also very nearly fell into that condition in graduate school.

    • partofme says:

      Eugh. My undergraduate institution never accepted credit cards for U-Bill payments. At all. This new law will only change things at universities who weren’t smart enough to figure this out the first time around.

      • jessjj347 says:

        Mine accepts payments with credit cards, but you get hit with a huge “convenience fee”. Therefor – I never, ever, user credit because even paying late is less of a charge.

    • Nigerian prince looking for business partner says:

      I had to do the same thing. I’d essentially “float” tuition payments on my credit card while other means of financial aid were still processing (typically for a few weeks). It seemed like my loans, GI Bill, and various grants were always being delayed for one reason or another. The registrar’s office was very unsympathetic and required a full payment prior to registering for courses.

  13. wcnghj says:

    Why was this written as if this idiotic bill is going to pass? Doesn’t the house need to re-vote?

    • wcnghj says:

      “After months of haggling, the terms of financial reform are set, so long as both houses of Congress vote to accept them in the coming days.”

      I don’t think they’ve secured the votes yet. Be sure to call your senators and tell them it will increase the banks profits via ATM fees.

      • frank64 says:

        Why will it INCREASE the banks profit? The ATM fees will be lower.

        • jamar0303 says:

          But more people will have to use them.

          • frank64 says:

            I guess, but there will be other options too. Like cash, or many of the big chains won’t change the policy. And we need to see what the banks will actually do. The prices were high because there was little choice for the merchants, now that there is the banks may respond with lower swipe fees for the small transactions. I really don’t see ATM revenue going up, unless people are just sheep and believe they don’t have any choices.

            • wcnghj says:

              Does this act cap ATM fees? If not, more people are going to use them.

              Bank of America charges outsiders $3 and your bank is bound to charge an out-of-network ATM fee.

              • frank64 says:

                Unfortunately is does. I don’t think they should, but the bill is going to have the Federal Reserve regulate ATM fees. This part of the bill is normally talked about more than the credit card fees.

                One of many problems is that the smaller banks are excluded, but of course this will be useless because if smaller banks have higher fees they won’t be competitive.

                • frank64 says:

                  Besides the banks have been fighting it tooth an nail, they will not make more on ATM fees even with the cap.

                  It is still up to consumers if they want to carry $10 or use an ATM. The ATM fees are certainly more volunteer than the credit card fees, which the banks force into every transaction whether I use a card or cash.

                  No, I cannot reasonably decide to do buisneinss with only places that don’t take cards to avoid the built in fees. Every grocery store takes them, ALMOST all restaurants.

                  • wcnghj says:

                    You don’t think this is going to lower grocery prices by 3%, do you?

                    • frank64 says:

                      I believe it will lower prices. Especially since one of the provisions is to offer a cash discount, so I may be able to pay cash and save. Many costs of the merchants fluctuate, and they are allowed to make a decision on how or when to pass it along to their customers based on the competitive environment in which they operate, I do not believe this should be any different. Just that the merchants, and thus us, have some flexibility to change our habits based on the prices of the credit service should compel the banks to lower fees, or not raise them. All I want to see is this cost to be handled like any other. Right now I am being charged for the cost of the fees even if I use cash. The cash customers are subsidizing the credit. I want to see that change. Then the normal supply and demand curve will apply to Visa/Mastercard,and this is the way it should be.

                  • jessjj347 says:

                    I’m going to side with the argument that a lot of people tie up their money in an exclusively electronic format, so they are going to face much more fees if they have to switch to cash.

                    Consider that many people have direct deposit for paychecks, direct payment for bills from the bank, online banking, etc. In my opinion, taking a step to favor cash is retrogressive. People will have to change their habits to switch back to cash (hard to do), when it may have taken them ten or more years to adjust to fully electronic money.

                    They’ll face more fees, because for people that use direct deposit, online banking, etc, they my need to use ATMs with fees more often. And I don’t think that it’s merely a “convenience” thing, as in the person would just need to travel farther to get to their own bank. I think there are other factors involved, for example, social factors. Think about if you were going to a restaurant with friends. You all go together, and you don’t happen to pass your own bank on the way. Well, you’re not going to “inconvenience” all of your friends by telling them to stop at your bank that’s in the opposite direction. So, you’ll end up using an ATM in the restaurant or nearby it. And of course, you could throw in tons of factors, but I’m just picking out an example from my own experience. Basically, my point is that you won’t hit fees just due to convenience, it will be convenience plus many other things like social factors.

  14. partofme says:

    I use the current system for my own little rebellion. If all I’m picking up is a little stick tape at the local hockey shop or a new can of balls at the local tennis center, I’ll make sure I have a few dollars in cash on me. It saves these little places their profit margin. On the other hand, I don’t care if all I’m getting is a $0.26 4X6 passport photo set at Wal-Mart. Out will come my credit card, and they can pay the fees.

    • Commenter24 says:

      After reading your comment all I can think is, “Geez, that’s pretty stupid.”

    • tbax929 says:

      I don’t for a minute believe you do this. And if you do, it’s really stupid.

      • partofme says:

        It’s remarkably stupid, don’t get me wrong. But, those particular situations definitely actually happened. Yes, I purchased my passport photo with a credit card. It took no more effort. It also took no more effort to grab a five dollar bill for stick tape. I don’t spend all that much money, and I’m not away from home long enough most of the time that I’m unable to grab a bit more cash if I’m planning to pick something up from a small retailer. When I do get caught at a local coffeeshop or something without cash, I’ll certainly go ahead and use the card, but I kinda feel bad about it.

    • Fenrisulfr says:

      I do that too.

    • Nigerian prince looking for business partner says:

      I think a lot of people do the same thing. I’m much more sympathetic to a local, independent business than I am to Wal Mart or Target. Things are different when you actually know or are neighbors with a business’s owner.

  15. NydiaGeben says:

    Carry a credit card balance month to month and you will end up paying interest on the chewing gum you bought 15 years ago. .. Nice financial management.

    • tbax929 says:

      You do, of course, realize you’re on Consumerist. Most of us are savvy consumers. Hence, most of us pay off our credit card(s) at the end of the month. We use them the same way someone like you might use cash.

      There’s no interest when you pay it off every month.

      Some of us are (shocker) even smart enough to have cards that reward us for using them this way. My plane tickets for my upcoming vacation were purchased with said rewards.

      You must be new around these parts.

      • 47ka says:

        I thought most people on Consumerist think that credit cards are evil and that anyone who uses them is a rube.

      • Randell says:

        How do you think those rewards are paid for? Off the backs of merchants. Have you ever seen the statement credit card processors give merchants? You getting rewards is not paid for by MC or Visa. MC and Visa run a monopoly on their product that can have fees that would make the mob blush

    • nbs2 says:

      Pay a credit card balance at the end of the month and you will end up paying less than the retail value for chewing gum you bought 15 days ago. .. Nice financial management.

  16. smo0 says:

    I don’t mind this. However…. it will be interesting to see how this pans out in places like Starbux.
    I use my card there every morning – for approx 5 dollars. If I have cash, I’ll use that instead, but generally I don’t carry any. I don’t own a car so I’m usually taking PT or walking a lot. I don’t feel comfortable carrying cash in case something happens.
    Very rarely, do people make purchases at starbux for more than 10 dollars… like I said – for places like this, or any “lunch” hour places, fast food restaurants, this should be interesting.
    That being said, the merchants are given this “option.” I doubt it would be enforced in places like these?

    • frank64 says:

      I don’t think it will change Starbucks one bit. The big corps get a lower swipe fee cost, so it doesn’t bother them. It is really the pizza places, delis and smaller convenience stores that want this. Most around me have been imposing minimums anyway, so I would think this won’t change anything for me. For one I always understood the cost and didn’t charge small things anyway.

      • smo0 says:

        I figured as much, seeing the credit card side of things – they generally get discounts on their transaction fees. I never really regard pizza places or take out with minimum charges because generally I exceed that amount by at least double, haha.

    • ghostfire says:

      If they can have their minimums set at $10, then they can set it to be $5, or $3 even. That way if your typical customer spends $3.19 on their morning coffee, they can still use their CC, but if someone’s just picking up a $0.25 newspaper, the store doesn’t have to eat the loss.

  17. NeverLetMeDown says:

    And once again, the responsible are punished for the sake of the ignorant and irresponsible.

  18. balthisar says:

    Totally ANTI-consumer. If I can’t use my plastic responsibly, then that’s my problem. For all you that think that by paying cash you’re only subsidizing my interchange fee, then you’re disillusioning yourselves. It’s called competition. You’re not going to see prices magically drop by 3%.

  19. Abradax says:

    As much as I hate government interfereing in the free market, I would have rather seen them ban flat fees for transactions under 5 dollars and regulate that no merchant can have a minimum transaction amount (Oh and that banks can’t charge different percentages for items under 5 dollars as opposed to over five).

    This would allow people to use their cards with every day purchases, and trim back the fees that make merchants try to get around their merchant services contracts.

    • frank64 says:

      That would be price controls and it gets real messy. I don’t like the ATM fee thing because of that. This minimum law, may do what we want without them actually setting the prices. The banks may lower the swipe fee for the low value transactions so that the merchants will not have to set the minimums. Visa and the banks do real well on these fees, while doing well is fine, they do have some room to negotiate if they want credit cards to be an automatic way for us to buy things. There is going to be some game theory played, and consumers merchants and Visa will be playing(Visa and the banks are pretty much the same here)

    • Commenter24 says:

      Or they could have just left it the f*ck alone like they should have.

  20. DaveBoy says:

    More BS by our non representatives. Just watch, no good will come of this. Will be as bad as the “health care” bill

  21. ginnel says:

    On the plus side we will never have to see that stupid ad where everyone is breezing thru the coffee shop like they’re in a production line and one “stupid” person trying to pay with CASH! makes the whole thing grind to a halt. First we’re told to forget cash. Use cards all the time or you’re part of the past. Now don’t use them. ?

  22. docjerry92 says:

    Other reason to to not use Credit Cards. Use CASH, If don’t have it then u can’t spend, most people have credit card and end up spending way more than people who carry CASH. Check it out why Dave Ramsey do not support Credit Card and goggle his name and you will see.

  23. pdcorcoran says:

    Don’t see why there’s so much fuss about this. The law is essentially codifying common practice. Credit card companies have tacitly approved minimum purchase levels for years.

    • wcnghj says:

      Minimums are area-specific. NOT a single store has a minimum where I live.

      • azntg says:

        Same here and I’ll be damned if they all decide to suddenly start implementing minimum charges when virtually nobody did before.

        There are very few cash-only / unreasonably high credit card minimum merchants out there where I feel that service or their products are unquestionably superior to their peers anyway.

  24. Talisker says:

    How about changing the law so that credit card transaction fees appear as a separate line on a receipt? There’s no reason that a cash buyer should pay the costs of those fees.

    That way if you want to spend $1.00 on your debit card you’re more than welcome to, but you’ll pay an additional 3 cents for the transaction fee.

    • ghostfire says:

      Or $0.18 – don’t forget the per-transaction fee that businesses (especially small businesses) get hit with whether the charge is for $1 or $100.

    • frank64 says:

      The banks don’t want that because they want the cards to be used more. The people here who do not like the new law don’t like it because they do not want to pay for the service they receive, they would rather all customers pay it.

      Here is the kicker: Most of the merchants wouldn’t want a line item either. The cards provide a real service to them. They are not totally against card or their fees, having a line item could lower sales if people see it in black and white. There are costs to cash too. Credit usage in many circumstances increase sales and they do not want to make the use of cards a negative consideration when someone is making a purchasing decision. All this law will do is give SOME control to merchants and consumers.

      I think many of the merchants will continue to eat at least of portion of the credit card fees and be happy doing it. They also will be glad they have a choice and don’t have to sell the newspaper at a loss.

  25. Eli the Ice Man says:

    I charged $0.52 to my credit card once.

  26. gman863 says:

    Almost every quickie mart in Houston has a handwritten sign posted at the register stating either a $5 or $10 minimum purchase for debit or credit cards.

    Mega-retailers like Wal-Mart and CVS won’t mess with it. Frankly, it will f^ck up the checkout process (and threfore labor costs) if someone with a $3.49 item and no cash is forced to go back and add another item to hit a $5 minimum while other people are in line.

    It’ll be interesting to see how other companies handle this. As an example, my electric company takes MasterCard and Visa, but there is a $4.95 “convenience charge” added for doing it.

  27. mojoald says:

    I’ll bet good money that by the time this goes into effect, Visa/Mastercard/Discover/etc will suddenly offer lower fees for transactions under $10. For example, doing away with the per-transaction charge and bill it out on a percentage basis only.

    That’s the power of the free market.

    • ghostfire says:

      If it was actually the free market, why would it take threat of changes to the law to produce a service that so many already want?

  28. damageddude says:

    That stinks about the rewards program. We’ve been placing our daughter’s pre-school, our son’s before and after care program and camp on a credit card that gives rewards, playing the balance off in full each month. We’ve done quite nicely with that and as anybody with two children knows that has been quite a bit of money on the card.

  29. HannahK says:

    “Both the Fed and universities will also gain the power to set maximum credit charges. That means no more free flights to Europe after charging your kid’s tuition to your rewards card. “

    Hah I don’t think that’s why they gave this power to universities, every credit card I have used has already had a clause excluding tuition from earning rewards.

    My university has considered giving a discount to those who pay by check over credit. I’m against it, and I really hope they don’t set a maximum now that it is allowed. It might save them some overhead, but it seems like a bad idea to move backwards technologically to pinch pennies. If I’m paying all that money to them, I want every payment option available.