Here’s What You Need To Know About Illegal Credit Card Fees

Most of us hardly think about what happens in the background when we check out using our credit cards. But credit card companies actually use complicated methods to decide on all those fees they charge. Most of the time these charges are quite legitimate. However, some shady businesses take part in practices that amount to illegal credit card fees. As a consumer, it pays to understand your rights so you avoid getting overcharged unfairly.

What Constitutes An Illegal Credit Card Fee?

There are a few types of credit card charges that are considered illegal under federal and state laws. These include:

Surcharges – Some vendors tack on extra fees when customers pay with a credit card. But surcharges above the regular price are prohibited by law unless the surcharge is clearly disclosed beforehand.

Minimum Purchase Requirements – Requiring a minimum transaction amount to use a credit card is illegal. Retailers cannot force you to meet a minimum purchase requirement.

Charging Extra for Paying with Credit – Additional fees cannot be charged for merely choosing to pay with a credit card over other payment methods. The retailer must charge the same price regardless.

Charging a Fee for Free Trials – Vendors cannot charge you simply for signing up for a free trial. The trial period must be completely free of charge.

Deceptive Late Fees – While late fees are allowed, the credit card company cannot charge unreasonable or obscured penalties. The late fee policy must be clearly disclosed.

As you can see, the common theme here is transparency. Card issuers and retailers must clearly inform consumers of any and all credit card fees upfront. If extra charges pop up that weren’t properly disclosed, they are likely prohibited by law.

How Do I Spot Illegal Credit Card Fees?

Carefully scrutinizing your credit card statements is the best way to identify improper fees. Look out for vague one-time charges from merchants that were not mentioned when you made a purchase. Exorbitant late payment penalties can also be a red flag.

When signing up for free trials or services, comb through the fine print to see if they sneakily charge a hidden fee just for enrollment. If you see credit card surcharges tacked on at checkout that were absent from shelf pricing, that’s a clear violation.

What Should I Do if I’m Charged with an Illegal Fee?

If you discover an illegal credit card fee, you’ll want to first contact the vendor and request a refund. Many reputable businesses will quickly reverse improper charges if made aware. If you catch an illegal credit card fee, the first thing to do is contact the business and ask them to refund it. 

A lot of decent companies will make things right if you speak up. The CFPB (Consumer Financial Protection Bureau) can help should your request be declined by the vendor. Your credit card provider could also reverse the charges if the mistake was on the vendor’s part. The Fair Credit Billing Act (FCBA) protects consumers against any unauthorized or unfair credit card fees.

Most importantly, a lawyer experienced in consumer credit law can review the situation, send demand letters, file disputes or lawsuits, and use their legal expertise to negotiate a refund on your behalf. For large dollar amounts of illegal credit card fees, hiring a lawyer ensures your rights remain properly defended and you receive the full remedies available under the law.

Stay Vigilant Against Illegal Credit Card Fees

Getting charged bogus fees can put a dent in your hard-earned money. While most businesses play by the rules, some unscrupulous vendors use illegal credit card fees as an avenue for profit. By staying informed about your rights and inspecting statements carefully, you can avoid falling victim to these predatory practices. It’s your right to speak up against any fees that don’t pass the smell test.