They engage in this practice because they and their banks do not want the expense of processing a credit card transaction involving a small amount of money. This practice defeats one of the major purposes of credit cards convenience and may force credit card users to spend more than they want to. In addition, minimum charge requirements vary from merchant to merchant, and there are no regulations requiring disclosure of these minimum purchase levels. Visa's and MasterCard's regulations prohibit minimum charge amounts. If a store requires a minimum purchase for Visa or MasterCard, point out to the store manager that the practice is prohibited by the card companies.
Some merchants seek to impose a service fee for all credit card purchases.
By charging extra for credit card use, the merchant passes the discount fee on to customers. Visa and MasterCard prohibit surcharges, and American Express discourages them. There are no laws on how and when surcharges must be disclosed, making it difficult to figure out the total price of an item. Further, credit card acceptance usually produces higher sales for merchants, offsetting the cost of processing credit card transactions. Note that a cash discount is legal and permitted under all credit card companies rules.