As you might recall, back in March, Marc and I bought a new car. I had intended to make a down payment of over $10,000 on my credit card, but the sales manager told me that the maximum I could pay with a credit card was $5,000. When I mentioned this on CFO, I received a comment from MITBeta stating that Visa and Mastercard do not allow merchants to impose minimum or maximum limits on purchases.
I had known that merchants can’t impose a minimum purchase amount, and that the mom and pop stores that have signs that say “Credit card purchase requires $10 minimum” were in violation of their merchant agreement. But it never occurred to me that the opposite might also be true.
I was reminded of this issue by this Bankrate.com article. The author quotes a Visa rep confirming that their “rules require merchants to always honor valid Visa cards regardless of purchase amount — large or small.” (Mastercard has the same rules, but American Express allows merchants to limit transactions.)
If I had known this back in March, I definitely would have insisted on being allowed to make the full down payment that I wanted to make. And, according to the Bankrate article, the dealership would most likely have given in when I informed them that I would pursue the issue with Visa. The article’s author points out that the dealer might want to re-negotiate a deal under such circumstances, but it wouldn’t have worked in our case. Marc and I had made clear when negotiating our old car’s trade-in value that we were prepared to walk away.
We don’t plan to buy a new car for at least another five years, but I plan on paying cash for that car. In fact, I’ve already started saving money for it each month. And in five years, I’ll be paying for that new car with a credit card!