extra charge for credit card purchase--legal?

<p>Our D is in an apartment managed in connection with the U. You have the option of paying by check or CC. If you pay by CC, you are assessed a fee. My bookkeeper says that is illegal, at least in HI. Anyone with an opinion? She says it violates the contract that the CC company has with all merchants that accept CCs. Of course, I wouldn’t want to make any “waves” while D is living there over the next year or so, but am wondering about this.</p>

<p>Thanks for anyone with knowledge about it & what to do. The charge is $15.22 on a rental of $1070.</p>

<p>I went to an Arco station the other day and the automated payment kiosk wanted to charge me an extra $.45 for using an AmEx card. I hit ‘cancel’ and went to a Shell station. I knew there was a reason I never go to Arco.</p>

<p>I’ve seen places assess an extra fee if the patron wants to use a CC so they can recover the fee the CC company charges them. I don’t know if it’s legal or not though.</p>

<p>I have read in CA (where my D is renting), it is illegal, but have not gotten this confirmed by people who would know. I have always been curious about this.</p>

<p>Himom, </p>

<p>Yes, it is a violation of the Visa/Mastercard agreement that the apartment complex signs with Visa/Mastercard. Theoretically you can contact Visa/Mastercard and protest, although I have done that to no avail.</p>

<p>ucsd<em>ucla</em>dad, Arco charges a fee for debit card use which is allowed…they don’t accept credit cards. Some gas stations give a cash discount for using cash and cash discounts are allowed but extra fees for credit card use is not permitted.</p>

<p>There are lots of colleges and universities that charge a convenience fee for using a credit card. The schools that my kids go to don’t but one that my son took a course at long ago does. I’ve seen many reports here on colleges adding a convenience fee to those using credit cards for tuition payments.</p>

<p>I think that this is reasonable given cash-back policies with credit cards.</p>

<p>

No - at this Arco it was accepting the AmEx credit card (not a debit card) but would have charged $.45 to do so. Maybe they operate differently in different states.</p>

<p>

I don’t see how one can determine the difference between ‘charging a fee for use of a CC’ vs ‘give a discount for paying with cash’. They’re exactly the same thing when you think about it.</p>

<p>Our town does this for property taxes. If there are laws against charging more for credit cards, I think that organizations get around this by going to a third-party to process the credit card payment. Our town uses a third-party company to do their credit card processing and they appear to add a charge for their services. It may be that this is what universities do.</p>

<p>I believe American Express is the only one that allows this. I know AmEx is the only CC accepted at Costco which otherwise only accepts debit cards. I don’t know how their agreement is written but even though it is a CC it is run thru as a debit card purchase, but without the PIN. A note about Arco; yhey are one of the few stations that do not take credit cards, but only debit cards and AmEx, so they require use of a PIN instead of a zip code as other stations require with the CC. Our daughter used my debit card there early one morning, and fortunately my husband got on our on-line account about an hour later and noticed some weird charges. Someone had put a scanner in the pay station at Arco and got my card number- we caught it early and were able to cancel the purchases and notify our bank. We never use Arco as I would rather just use my zip code to input.</p>

<p>My son’s university allows you to charge your tuition on the credit card but charges a 3% fee to do so. </p>

<p>A pricey fee.</p>

<p>The following states prohibit merchants from adding surcharges to credit card transactions</p>

<pre><code> * California
* Colorado
* Connecticut
* Florida
* Kansas
* Maine
* Massachusetts
* New York
* Oklahoma
* Texas.
</code></pre>

<p>So it looks like it’s legal to do so in Hawaii.</p>

<p>

</p>

<p>[Financial</a> Guide: MERCHANT CREDIT CARD ABUSES: What They Cannot Ask You To Do](<a href=“http://fso.cpasitesolutions.com/premium/le/06_le_ic/fg/fg-merchants.html]Financial”>Financial Guide: MERCHANT CREDIT CARD ABUSES: What They Cannot Ask You To Do)</p>

<p>VBallmom is correct re. rules in California. Merchants typically get around the law using the loophole language - they raise the cost, and then give a cash discount.</p>

<p>I just checked campuses for the University of Florida, University of Texas, University of Oklahoma, University of Maine and University of California and they charge convenience fees for credit cards in various programs. So either the state legislators have exempted state colleges and universities from the merchant credit card laws or they have found loopholes by using third-party payment systems.</p>

<p>But the transaction is in CA. The lady I spoke to at the CC department was very vague and seemed somewhat confused. I know our state does charge a fee if you use charge cards for some transactions.</p>

<p>I think that our colleges should follow the laws of whatever state they’re in, whether or not they think the law is “fair.” If it is illegal, they shouldn’t do it!</p>

<p>A think a lot depends on how the merchant “structures” the thing and what they call it and how it’s presented.</p>

<p>Oklahoma State University and the cc I am taking classes at also charge a fee for bills (including books at the CC) paid for with a credit card.</p>

<p>My sons’ colleges - both in California, one public the other private - both add a fee for credit card payments. The fee is much more than the rebate percent that I’d earn for using the card, so not worth it to me to pay using my Visa :(</p>

<p>Amex does not allow a merchant to charge a fee above and beyond what they would charge for a MC or Visa charge. That violates their agreement with Amex.</p>

<p>Credit card companies charge merchants fees, usually a percentage of the purchase price. Imagine the fee on a semester’s full tuition charge of $25,000 or so. Most institutions of higher ed are non-profits and can ill-afford such fees.</p>

<p>My daughter’s private school in Texas charged a fee for using a credit card on the tuition deposit last spring. Although I was irritated by that, I am doubtful that they are breaking a law since they do have attorneys that look over their contracts. I wonder if there is an out for educational institutions (i.e. they are not considered a “merchant”)?</p>

<p>The link above (vballmom’s post) contains out of date and incorrect information. It is now legal, and within the guidelines of credit card processors, to have a minimum credit card transaction amount. I do not know if anything else in that piece is incorrect as that’s the item in the new legislation that meant the most to me. I just wanted to point out that the linked information is out of date.</p>

<p>I live in NY, and my son goes to RPI, also in NY. I have set up a TuitionPay account with Sallie Mae to make monthly payments, and there is most definitely an extra convenience charge to pay tuition using a credit card. I believe it was over $50 per payment, so I just started doing electronic funds transfers from my bank instead.</p>

<p>I was kinda bummed-- I figured we’d get at least enough frequent flyer miles using the credit card for a free ticket.</p>