Surcharge on MC or Visa purchase

Our new landlord announced that we can pay our rent by credit card. Excited that we would be racking up the frequent flier miles on our airline credit card, we looked into the details, and found that the billing service our landlord wants us to use will be adding a 2.7% surcharge to the amount billed onto a credit card.

I thought that in at least the U.S., retailers who have contracts with MasterCard and Visa are not allowed to impose a surchage on those purchases, vs. what they would charge for cash payment.

My favorite local record store passes on the merchant fee to the customers. They’ve got a sign on their counter to that effect, and everything.

I don’t mind, given that they probably get killed by people using credit cards to pay for five bucks worth of used LPs.

It is probably legit. I am sure that the charge is the billing service’s and not the credit card company’s. The billing agency has probably negotiated an extremely low merchant surcharge rate for themselves or none at all. There is no discrepancy between the charges on cash or credit because they probably don’t take any other forms of payment besides credit cards (otherwise, why would you use them?). The credit card company makes it’s money by charging interest (8% - 21% or more) on balances that aren’t payed off within the billing cycle.

That being said, the frequent flyer miles are not worth nearly enough to justify using their service.

Spooky. I had always believed that uk retailers were similarly obliged not to levy a surcharge on credit card purchases. I just heard on the radio 5 minutes ago, however, that Ikea have announced they are going to start introducing surcharges in the UK. If I heard the story correctly, they are going to charge a flat fee of £0.70.

My credit card gives me 0.5% cash back on all purchases I make on it. So, next time I shop at Ikea I will have to figure that it only makes financial sense to use my credit card if I am making a purchase exceeding £140.

I thought so too—but your landlord isn’t a retailer! I don’t think the rules are the same for paying bills, fees, taxes, etc. with a credit card.

Does the landlord use the same billing service to accept rent payments by cash or check, or does he just take those directly? If the latter, it would definitely explain the difference. But even if not, I’m guessing the difference is due to the fact that billing services don’t have to abide by the same rules as retailers.

I’m pretty sure the contract my former employer (online merchant) had with the associations (Visa, MC, AmEx–I know of no law regarding charging of fees, just the associations’ policies) forbid minimum purchase amounts (even though some smaller merchants try to do it) and fees charged only to credit card users. I think they exempt governments from that last rule. I can pay my personal property tax by credit card if I pay a “convenience fee.”

I don’t have a copy of the contract handy to quote.

I seem to recall that, some years ago, gas stations were not allowed to impose a surcharge for credit card purchases, but they WERE able to offer a discount for cash.

A distinction without a difference, but apparently it violated neither laws, if any, nor their contracts.

I have a home business and accept credit cards for payment. My processing fee is 3% of the total sale. I am allowed to charge that to my customers as a “processing fee.” Just FYI.