Is it legal for a store to have a minimum charge for credit/ debit transactions?

I've heard it is illegal, but everyone does it anyway. So is it really illegal?
Answer:
No it's not illegal, however MasterCard and Visa have a rule that merchants aren't supposed to be able to have minimum charges. However for small businesses MC/VI normally look the other way.

They do this to ensure that they collect hefty processing fees. (Which is why some companies ask for a min amount) Any type you process a MC/VI transaction there's a $0.20-$0.30 transaction authorization fee, PLUS 2-3% of the total transaction is taken as a processing fee.

Now debit cards are processed through different companies. Note that the cards you get from the bank are a combo of a credit and debit card. It depends which why you use the card. If you use your PIN it's being processed as a debit, and if you have to sign then it's processing as credit.

The rules for credit don't apply to debit since they're a different company. Unlike the huge fees that credit companies charge debit companies only charge a flat $0.30-$0.50 fee per transaction, with no additional %. This is why a lot of companies are now forcing you to key in your PIN, and not allowing you to use your bank card as a "credit" card, since even though they pull from the same account they're charged a huge amount more just for having you sign instead of putting in your PIN.

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Yeah it's legal!

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Of course it's legal. They can make any terms on payment they want.

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NO

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Actually, it isn't. The stores have to sign agreements with the credit card companies in order to accept the cards. Those agreements prohibit them from setting minimums for purchases. However, there's really nothing you can do about it at the time of purchase, even if you mention this to the store. All you can do is report them to the card company.

The reason the stores do it, if you don't know, is that they have to pay transaction charges for each card purchase, s it eats into their profit more for small purchases.

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Credit card companies charge the business for EACH swipe of the credit card. It doesn't make financial sense to swipe a card for a $2 transaction and then have to pay the entire amount to the credit card company. Hence, the minimum charge.

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Stores lose money if they don't. Credit card companies charge the store for each swipe.