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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
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Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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What is the most I can charge for interest on unpaid balances

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What is the most I can charge for interest on unpaid balances for bills to our customers? Our normal policy is payment due at time of service. I would like to charge a percentage of about 12% per month on unpaid balance. Ultimately, I do not want to carry anyone's balance. Also, do I have to charge all customers the interest charge or can I charge only the people who do not normally carry a balance with us?
Submitted: 7 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 7 years ago.
The usury laws in Montana have been held to only apply to the lending of money and selling persons goods or services on credit is not considered the loaning of money. Thus, you can charge whatever is "reasonable" in your industry. The courts have held that 18%-24% interest would be reasonable. As a business, you can set your terms of sale as you see fit with each customer. Thus, you can charge the customers as you see fit pursuant to your contract with them, but in order to sustain any claims against you that the charges are unreasonable you should be charging the same rates to all customers.

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