$10 Credit Card Minimums Coming Soon?

Call it a credit card backlash. A fight against costly interchange fees by frustrated retailers. And an end to charging that $1 pack of gum at your local gas station.

Thanks to federal consumer protection laws regarding the use of credit cards, merchants will soon be able to set credit card minimums of $10.

That means you won’t be able to charge your morning cup of coffee, or even your $5 footlong, so long as merchants actually take advantage of the new rule.

Currently, American Express and Discover allow credit card minimums, but only if every other card issuer accepted by the merchant is held to the same standard.

But Visa and MasterCard contracts forbid credit card minimums, so unless the retailer only accepts American Express and Discover, credit card minimums are contractually not okay.

This means credit card minimums have seldom been seen outside mom and pop shops that skirt the credit card issuers’ rules.

However, that may all change with this new rule, especially since credit card fees take a decent chunk out of the thin margins small retailers are currently afforded.

For example, a $1.50 pack of gum at a convenience store costs the average retailer 30 cents, while a $7.00 sandwich costs the retailer 45 cents.

Compare this to the $1.15 or so that $30 of gas costs a retailer, and you can see why the small guys are making noise.

Technically, the rule should lower the cost of goods, but don’t expect it to be passed onto the consumer.

Just expect to carry more cash in your wallet going forward.