Texas Credit Card Fee Ban Applies To Business, Not To Government

By: Paul J. Gately Email
By: Paul J. Gately Email

WACO (January 30, 2013)--Credit card pass through fees may be illegal in Texas when it comes to merchants, but the government can charge customers to use their cards to pay fees or fines.

On Sunday credit card vendors announced as a result of a court action that businesses could now pass through a percentage of each transaction to credit card holders to cover the cost of using their cards, but Texas is one of 10 states nationwide that prohibits the pass through of swipe fees for business.

There’s an exception, however.

Since 1987 the Texas Legislature has provided a rule that allows government entities to pass along credit card user fees to the credit card holder.

McLennan County District Clerk Karen Matkin said any county government office that accepts money for fines or fees is allowed to assess the credit card holder both a use fee of $2 and a fee that amounts to a percentage of the fee being paid that covers the credit card company charge.

"The Legislature decided it was a convenience fee that people who use credit cards should pay so those charges weren't the responsibility of the county," Matkin said.

"At first when we started charging the fees a lot of people got mad about it, but using a credit card to pay fees or fines is a convenience to the payer and not to the county," she said.

The fees collected by county offices stay in the county, Matkin said, and are deposited on the county's general fund so when credit card companies bill the county for the service, funds are available to pay the costs.

Fees collected in McLennan County's District Clerk's office amount to a significant amount annually, Matkin said, after she reported the office collected $2,529,275 in fees, charges and fines in 2012.

Of that number she estimated about 2.78 percent, or $70,411.90, was paid by credit card.

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