The answer to your question depends on the MasterCard and Visa rules and your institution’s agreements with MasterCard and Visa. We have reviewed the MasterCard and Visa rules, which are described below. But we note that these rules are frequently revised, so it may be best to check with Visa and MasterCard directly to see if these transactions are permissible and whether your institution may charge fees for these payments.

Under Visa’s operating regulations, with limited exceptions, we do not believe that a Visa card may be used to make a loan payment. A Visa card may not be used to collect existing debts by a “merchant,” defined as any entity that contracts with Visa to originate card transactions: “A U.S. Merchant must not accept a Visa Consumer Credit Card or Commercial Visa Product, issued by a U.S. issuer, to collect or refinance an existing debt.” A footnote provides an exemption for a “Visa Business Check Card.” Visa International Operating Regulations (printed page 412/page 448 of PDF file; “merchant” is defined on printed page 1027/page 1063 of the PDF file). However, it appears that it is possible to take debt payments by credit card you participate in Visa’s Debt Repayment Program, described in Visa’s Operating Regulations (see printed pages 546–548/pages 582–584 of the PDF file). If you participate in that program, there are likely restrictions on the fees that you can charge. However, because the program documents and rules are not publicly available, we are not able to verify any information about permissible fees.

We are not aware of any identical provisions in the MasterCard rules. MasterCard does prohibit transactions that refinance existing MasterCard obligations or that are entered into only after a cardholder’s personal check was dishonored: “A Merchant must not submit . . . any Transaction that: 1. Represents the refinancing or transfer of an existing MasterCard CardHolder obligation that is deemed to be uncollectible; or 2. Arises from the dishonor of a MasterCard CardHolder’s personal check.” MasterCard Rules (printed page 5-19/page 95 of the PDF file). However, this restriction would apply only to MasterCard debts, not to debts owed to your institution.