Can I charge more for credit?

Q. As I was making a purchase, a store clerk wanted to charge me extra for paying with a credit card. His reasoning was that it covered the fee the store pays for processing the transaction. Is that legal?

A. No. Section 167 of the federal Truth in Lending Act states: “No seller in any sales transaction may impose a surcharge on a cardholder who elects to use a credit card in lieu of payment by cash, check or similar means.”

Bankcard companies also include in their agreements with retailers a section that prohibits businesses from imposing a surcharge on credit card purchases. Businesses that violate this or any part of their bankcard agreement may be dropped from the bankcard program.

However, businesses are allowed by law to offer a discount for purchases made by cash or check. Check your bankcard agreement to see what it says regarding these transactions.

The difference between a surcharge for credit (which is illegal) and a discount for cash (which is legal) is the advertised price—a retailer cannot charge a credit card customer more for an item than its advertised price.

Do you have a retailing question? Ask Michigan Retailers in writing:
by mail: 603 South Washington
Avenue, Lansing, MI 48933;
by fax: 517.372.1303;
by e-mail: tscott2@retailers.com.