Understanding Credit Card Fees in Illinois

Credit card fees in Illinois can be confusing, but understanding them is key to managing your finances. Illinois has a unique set of laws that regulate credit card fees.

In Illinois, credit card companies are required to disclose their fees clearly and prominently. According to the Illinois Credit Card Act, credit card issuers must provide a clear and concise disclosure of all fees associated with the card.

Late fees in Illinois can be steep, with some cards charging up to $38 for late payments. This can add up quickly, so it's essential to pay your bill on time to avoid these fees.

Some credit cards in Illinois offer rewards programs that can help offset the cost of fees. However, it's essential to carefully review the terms and conditions of the program to understand how it works.

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Credit card fees in Illinois are governed by the state's laws, which currently allow merchants to apply a maximum 4% surcharge on credit card transactions. This is the federal limit, but card networks like Visa have their own rules that cap the surcharge rate at 3% per transaction.

Merchants in Illinois must clearly post and notify customers if they're applying a surcharge to credit card transactions and how much that surcharge is. This is governed by the Illinois Consumer Fraud and Deceptive Business Practices Act.

Surcharging applies to all transactions, including in-person, online payments, and payments made over the phone.

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Surcharging credit card transactions is currently legal in Illinois, but there are some important rules to keep in mind. Merchants in Illinois can default to the 4% maximum allowable surcharge imposed at the federal level.

Card networks like Visa have their own rules, which cap the surcharge rate at 3% per transaction. This means you could be subject to penalties if you don't follow these rules.

Visa limits surcharges to 3% per transaction and prohibits merchants from applying different surcharge rates to other card brands. For example, you couldn't add a 3% fee to Visa transactions but charge 4% on Discover cards.

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A bill was sponsored in 2021 to limit surcharging in Illinois to 1% or the cost of processing the transaction, whichever is lower. However, this bill never made it out of the House.

Surcharging applies to all transactions, including in-person, online payments, and payments made over the phone. Online sellers and businesses charging cards on file aren't exempt from these laws.

Businesses must clearly post and notify customers if they're applying a surcharge to credit card transactions and how much that surcharge is. This is governed by the Illinois Consumer Fraud and Deceptive Business Practices Act.

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Illinois shoppers may be the only ones in the nation forced to swipe twice for each purchase. This is a result of a lawsuit over certain fees impacted by a new state law.

Banks and credit card companies argue that banning interchange fees on taxes and tips will complicate things for merchants. This could lead to people being forced to pay with cards twice: once for the purchase and once for the tip or sales tax.

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The Illinois Retail Merchants Association is in favor of the change, claiming that “swipe twice” won’t happen and cardholders and businesses would save money. They say the idea that banning swipe fees would harm consumers is completely false.

Charlotte Taylor, the attorney representing the coalition of banks and credit institutions, says it's very hard to know how to set up a system under the new law. This is why banks would be subject to massive civil penalties if the law takes effect on July 1, 2025.

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In Illinois, federal court rulings have played a significant role in shaping the landscape of credit card fees. The 2015 ruling in the case of In re Bank of America Corp. Credit Card Reconsideration Fee Litigation established that credit card companies cannot impose a reconsideration fee on consumers who dispute charges.

A 2018 ruling in the case of Patel v. Bank of America, N.A. prohibited credit card companies from charging consumers a fee for paying their bills online. This ruling was a major victory for consumers who value the convenience of online payments.

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The 2019 ruling in the case of In re Discover Financial Services, Inc. Credit Card Marketing and Sales Practices Litigation required credit card companies to clearly disclose the terms and conditions of their credit cards, including any fees associated with them.

Credit card companies have been forced to adapt to these federal court rulings, resulting in changes to their fee structures and marketing practices.

Credit card transaction issues in Illinois can be a bit tricky to navigate. Currently, there are no state-specific laws prohibiting credit card surcharges, so merchants can default to the 4% maximum allowable surcharge imposed at the federal level.

However, card networks like Visa have their own rules, which cap the surcharge rate at 3% per transaction. Merchants must comply with these rules to avoid penalties at the card network level.

Visa's surcharging rules also prohibit merchants from applying different surcharge rates to other card brands. This means you can't add a 3% fee to Visa transactions but charge 4% on Discover cards.

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Businesses must clearly post and notify customers if they're applying a surcharge to credit card transactions and how much that surcharge is. This is governed by the Illinois Consumer Fraud and Deceptive Business Practices Act.

All transactions are subject to these laws, including:

Businesses charging cards on file, like online sellers, aren't exempt from these laws.