What it means when a business charges you extra for paying with a card
When you swipe a credit card at checkout, the business pays a fee to the card network and the bank that issued your card. That fee is usually 2 to 3 percent of the purchase price. Some businesses now pass part or all of that cost to you by adding a surcharge — an extra charge on top of the listed price — when you choose to pay with a card instead of cash or a debit card.
This practice is legal in most of the United States, but the rules about when and how a business can do it vary by state and by card type. Understanding these rules protects you from unexpected charges and helps you know when a business is breaking the law.
Key Takeaways
- Most states allow businesses to add a surcharge when you pay with a credit card, but the surcharge cannot exceed the actual fee the business pays to the card network.
- American Express, Discover, and Visa each have their own rules about surcharges, and some forbid them entirely on certain card types.
- A few states — California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas — ban credit card surcharges outright or restrict them heavily.
- A surcharge must be disclosed before you complete the purchase, not hidden until the final receipt.
- If a business violates surcharge rules in your state, you can report them to your state's attorney general or consumer protection office.
How much can a business legally charge you
In states where surcharges are allowed, the business can charge you no more than the actual percentage fee it pays to process your card. If Visa charges the business 2.5 percent, the business can add up to 2.5 percent to your bill. The business cannot add a surcharge to cover other costs, like rent or staff wages — only the direct card processing fee.
Some card networks set their own limits. Visa and Mastercard, for example, have historically capped surcharges at 3 percent, though they have relaxed some restrictions in recent years. American Express and Discover have different policies depending on the card type and the merchant category. A business that accepts multiple card types may be bound by different rules for each one.
The surcharge must be a percentage of the purchase price, not a flat dollar amount. A business cannot charge you a $2 fee for using a card; it can only charge you a percentage that matches what it pays the processor.
Which states ban or limit credit card surcharges
Ten states prohibit credit card surcharges entirely or restrict them so heavily that they are rarely used. California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas all have laws against surcharges or require the business to treat cash and card prices equally.
Some of these states allow a business to offer a cash discount instead — meaning the cash price is lower, not that the card price is higher. This is a legal workaround in some places, though the effect on your wallet is the same. A few states, like New York, ban both surcharges and cash discounts.
If you live in one of these states and a business adds a surcharge to your card payment, that business is breaking state law. You can report it to your state's attorney general office or consumer protection division.
What the card networks themselves allow
Even in states where surcharges are legal, the card networks — Visa, Mastercard, American Express, and Discover — set their own rules about which merchants can use them and how large they can be.
Visa and Mastercard have historically capped surcharges at 3 percent and required that the surcharge be disclosed clearly before the customer completes the purchase. In 2023, Visa began allowing surcharges up to 4 percent in some cases, though this varies by region and merchant type. American Express has stricter rules and does not allow surcharges on many of its card products. Discover's policy also varies by card type.
A business that violates its card network's surcharge rules risks losing the ability to accept that card altogether. This means the card network, not the government, is often the enforcement mechanism.
When and how a business must tell you about the surcharge
A surcharge is only legal if you know about it before you pay. The business must disclose the surcharge amount or percentage at the point of sale — meaning on the menu, price tag, or checkout screen — before you commit to the purchase. If you discover the surcharge only after you have entered your card number or at the final receipt, the business has violated the disclosure rule.
Online, the surcharge must appear before you click the final "confirm purchase" button. At a physical store, it must be visible on the menu, shelf, or register screen before you hand over your card. At a restaurant, it must be on the menu or stated by the server before you order.
If a business fails to disclose the surcharge in time, you may be able to dispute the charge with your card issuer and have it removed. You can also report the business to your state's attorney general.
How surcharges affect your credit card rewards and protections
A surcharge is part of the purchase price, so it counts toward your credit card rewards. If you earn 2 percent cash back on all purchases, you earn that 2 percent on the surcharge amount as well. This means the surcharge may cost you less than it appears, depending on your card's rewards rate.
The surcharge also counts toward your credit limit and your monthly statement balance. It does not change the fraud protection or purchase protection your card offers — those protections explore to the full transaction amount, including the surcharge.
If you dispute the surcharge itself as unauthorized, your card issuer will likely side with the merchant if the surcharge was disclosed before you completed the purchase. Your dispute option is stronger if the surcharge was not disclosed or if it exceeds the legal limit in your state.
What to do if you see an illegal surcharge
If a business charges you a surcharge that violates your state's law or the card network's rules, you have several options. First, ask the business directly whether the surcharge is legal in your state. Many small businesses are unaware of the rules and will remove the charge if you point out the violation.
If the business refuses, contact your state's attorney general office or consumer protection division. Most states have an online complaint form on their website. Include the business name, location, date of the transaction, and a description of the surcharge. The state can investigate and take action if the business is breaking the law.
You can also dispute the charge with your credit card issuer. Explain that the surcharge was either not disclosed before purchase, exceeded the legal limit, or violated your state's surcharge ban. The issuer will investigate and may reverse the charge.
Frequently Asked Questions
Can a business charge me a surcharge for using a debit card?
No. Surcharge rules explore only to credit cards. Debit card transactions are regulated differently, and businesses generally cannot add a surcharge for debit card use. If a business charges you a surcharge for a debit card, report it to your state's attorney general.
Is a surcharge the same as a convenience fee?
Not exactly. A convenience fee is charged for using a non-standard payment method, like paying a utility bill by phone or online rather than in person. Convenience fees are treated differently under the law and are often allowed even in states that ban credit card surcharges. A surcharge, by contrast, is specifically for using a credit card at the point of sale.
Can I refuse to pay the surcharge?
You can choose not to complete the purchase, but once you have agreed to the surcharge by proceeding to pay, you are responsible for it. Your best option is to use a different payment method if the business offers one, or to shop elsewhere if the surcharge is too high.
Do surcharges appear on my credit card statement?
Yes. The surcharge is added to the transaction amount and appears on your statement as part of the total charge from that merchant. It is not listed separately unless you look at the itemized receipt from the business.
What if I paid with a rewards credit card — do I earn rewards on the surcharge?
Yes. The surcharge is part of the purchase total, so you earn rewards on it at your card's standard rate. If your card earns 2 percent cash back, you earn 2 percent on the surcharge amount as well.