Charging a credit card fee is legal in most situations, but the rules depend on where you live and what type of business you are

A business can charge you a fee for paying with a credit card in most U.S. states and many other countries. However, the rules are not the same everywhere. Some states ban the practice entirely. Others allow it only if the business tells you about the fee beforehand. A few states cap how much the fee can be. The card networks themselves—Visa, Mastercard, American Express, Discover—also set rules that their member businesses must follow.

The short answer: it is usually legal, but the business must follow specific rules about disclosure and amount. If a business charges you a fee without warning, or charges more than the law allows, you may have grounds to dispute it or report them.

Key Takeaways

  • Ten U.S. states ban credit card surcharges outright: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.
  • In states where surcharges are legal, the business must tell you the fee amount before you complete the transaction, not after.
  • Visa and Mastercard rules cap surcharges at 3 percent of the transaction total in most cases, even in states where surcharges are otherwise legal.
  • Debit card fees and convenience fees (for paying by phone or online) follow different rules than credit card surcharges and may be restricted differently.
  • If you are charged a fee you believe is illegal, you can report it to your state's attorney general or the Federal Trade Commission.

States that ban credit card surcharges entirely

Ten states have laws that make it illegal for any business to charge a surcharge when you pay with a credit card. These states are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. In these states, a business cannot add a percentage-based fee to your bill because you chose to pay with a credit card instead of cash or another method.

If you live in one of these states and a business charges you a credit card fee, that charge violates state law. You can report it to your state's attorney general office or ask the business to remove the charge. Some of these states allow small administrative fees for processing (such as a flat $0.50 fee) but not percentage-based surcharges.

States where surcharges are legal with disclosure requirements

In the remaining 40 states, businesses are generally allowed to charge a surcharge for credit card payments, but they must follow strict rules. The most important rule is disclosure before the transaction is complete. The business must show you the surcharge amount and total cost before you authorize the charge. This can happen on a sign at the register, on the receipt before you swipe or insert your card, or on the online checkout page before you click "confirm purchase."

If you see the fee only after the charge has gone through—on your receipt or your credit card statement—the business has violated the disclosure rule. You can dispute this charge with your credit card company or report the business to your state's attorney general.

Some states also cap the surcharge amount. For example, Illinois caps surcharges at 2 percent of the transaction. Even in states without a state-level cap, Visa and Mastercard rules typically limit surcharges to 3 percent, which means most businesses cannot charge more than that without risking their merchant account.

Visa and Mastercard network rules on surcharges

Visa and Mastercard set their own rules for member businesses, and these rules often are stricter than state law. Both networks cap surcharges at 3 percent of the transaction total (or the actual cost of processing, whichever is lower). This means that even in a state where surcharges are legal and uncapped, a gas station or restaurant that accepts Visa or Mastercard cannot charge you more than 3 percent.

Both networks also require that the surcharge be clearly disclosed before the transaction is complete. If a business violates these rules, Visa or Mastercard can fine the business or revoke its ability to accept their cards. This enforcement is one reason why most surcharges you see are well below 3 percent.

American Express and Discover have similar rules, though the exact percentages and disclosure requirements may differ slightly. If you have questions about a specific surcharge, you can contact your card issuer to ask whether it complies with the network's rules.

Debit card fees and convenience fees are different

Credit card surcharges are not the same as debit card fees or convenience fees, and the rules are different. A debit card surcharge is treated more strictly in many states—some states that allow credit card surcharges ban debit card surcharges. A convenience fee is a charge for using a particular payment method or channel, such as paying by phone instead of in person, or paying online instead than by mail. Convenience fees are often legal even in states that ban surcharges, because they are framed as a fee for the convenience of the service, not a penalty for the payment method.

For example, a utility company might charge you $2 to pay your bill by phone, but not charge you to pay in person or by mail. This is usually legal because the fee is for the phone service itself, not for using a credit card. However, the business still must disclose the fee before you complete the transaction.

How to report an illegal or undisclosed surcharge

If you believe you have been charged an illegal surcharge, start by contacting the business directly. Explain that the surcharge violates your state's law or the card network's rules, and ask them to remove it. Many businesses will do so rather than risk a complaint.

If the business refuses, you have two options. First, you can dispute the charge with your credit card company. Call the number on the back of your card and explain that you were charged a surcharge that was not disclosed before the transaction. Your card issuer can investigate and may reverse the charge. Second, you can file a complaint with your state's attorney general office or the Federal Trade Commission (FTC). Both agencies track complaints about unfair business practices and can take action if a pattern emerges.

Keep records of the transaction, including the receipt, your credit card statement, and any communication with the business. These documents will help if you need to dispute the charge or file a complaint.

Frequently Asked Questions

Can a gas station charge me a fee for using a credit card instead of cash?

It depends on your state. In the ten states that ban surcharges, no. In other states, yes, but only if the fee is clearly posted before you pump gas and swipe your card. Most gas stations that offer a cash discount instead of a credit card surcharge do so to avoid the disclosure hassle. If you see a surcharge at the pump that you were not warned about, report it to your state's attorney general.

What if a restaurant charges me a surcharge but didn't show it until after I signed the receipt?

That violates the disclosure rule in almost every state. Contact your credit card company and dispute the charge. Explain that you were not informed of the surcharge before authorizing the transaction. Your card issuer should reverse it. You can also report the restaurant to your state's attorney general for unfair business practices.

Is a 3 percent surcharge always legal?

Not in the ten states that ban surcharges entirely. In other states, a 3 percent surcharge is usually legal if it is disclosed before the transaction, but some states cap it lower. Check your state's attorney general website to confirm the rules in your state. If the surcharge is disclosed and within the legal limit, you can choose to pay with cash or another method instead.

Can a business charge a fee for paying by credit card online?

Yes, in most states, as long as the fee is shown on the checkout page before you click to confirm your purchase. The same rules explore: the fee must be disclosed before the transaction is complete, and it cannot exceed the state or network limits. If you see the fee only after your purchase is complete, dispute it with your card issuer.

What is the difference between a surcharge and a convenience fee?

A surcharge is a fee for using a specific payment method, like a credit card. A convenience fee is a fee for using a particular service or channel, like paying by phone instead of in person. Convenience fees are often legal even in states that ban surcharges. However, both must be disclosed before the transaction is complete, and both must be reasonable in amount.