Are Credit Card Surcharges Legal?

What Is a Credit Card Surcharge?

A credit card surcharge is a fee that businesses may charge to customers who pay with a credit card. The fee is charged as a percentage of a transaction and added to the transaction total. For example, if your purchase total is $100 and the business charges a 3% surcharge, you'll pay $103 when you use a credit card.

Businesses pay a fee to their credit card processor each time they accept a credit card payment. Rather than absorb these swipe fees or raise prices for all customers, some businesses choose to pass the cost directly to credit card users through a surcharge.

Surcharge vs. Convenience Fee

Convenience fees and surcharges are often mistaken for one another, but they serve different purposes and follow different rules.

A convenience fee is an extra fee a business adds when you make a purchase through a nonstandard payment channel rather than in person. This fee applies regardless of the payment method, whether you pay by credit card, debit card or check.

Businesses can only charge a convenience fee if they offer at least one other standard payment option. For instance, that means businesses can't charge a convenience fee if it accepts payments only by phone, mail or online.

Unlike surcharges, convenience fees aren't tied to credit card processing costs or transaction amount. They're usually a flat fee (not a percentage of the purchase price) and must be disclosed before payment so you can cancel and avoid the extra cost if necessary.

Credit card networks and state laws limit how and when convenience fees can be charged. For instance, a credit card network may only allow certain types of organizations to charge convenience fees.

Visa and Mastercard, which process the majority of credit card transactions in the U.S., don't allow both types of fees on the same transaction. Convenience fees are also not allowed on recurring or installment payments.

Are Credit Card Surcharges Legal?

Credit card surcharges are generally legal, but they're regulated by state laws and rules set by Visa and Mastercard.

If a business plans to surcharge, they're required to:

• Notify their card network and payment processor at least 30 days in advance.
• Disclose surcharges clearly at the entrance, point of sale and online where credit cards are first mentioned.
• List the surcharge separately on your receipt.
• Return the surcharge on refunded transactions.

Surcharges can either be the merchant's actual credit card processing fee or 3%, whichever is lower. Importantly, surcharges can only apply to credit cards. Businesses aren't allowed to apply surcharges to debit cards, prepaid cards, checks or cash payments.

Surcharges are banned in Connecticut, Maine and Massachusetts. Surcharging becomes legal in Oklahoma effective November 1, 2025, but is subject to a 2% cap.

Tip: Some businesses take the opposite approach by offering a cash discount instead of a credit card surcharge.

What to Do if You Incur an Illegal Credit Card Surcharge

If you believe a merchant has charged an illegal surcharge, you can report the business to your state attorney general's office and the district attorney in the county where the business operates. Businesses may be fined for violating laws prohibiting surcharges.

Even if the fee isn't against state law, it may still violate credit card network rules. In those cases, you can report the issue directly to Visa, Mastercard or the relevant card network. Businesses that break these rules may face fines or lose their ability to accept that credit card brand.

The Bottom Line

Credit card surcharges can help businesses recover the cost of accepting credit cards, but they come with rules to protect consumers. Over time, paying small surcharges can add up, especially if you use credit cards for everyday purchases. You can avoid surcharges and save money by paying with cash, debit or prepaid card. But if a credit card is your main form of payment, consider a rewards card to offset the fee.