What merchants can charge you for paying with a credit card
A surcharge is an extra fee a merchant adds to your bill when you pay with a credit card instead of cash. Federal law allows merchants to charge surcharges in most states, but the rules vary significantly by location. Some states ban surcharges entirely. Others allow them but cap how much merchants can charge. A few states allow surcharges with almost no restriction.
The key distinction is between a surcharge and a discount. A merchant can legally offer a discount for paying cash in any state. A surcharge — charging more for credit — is treated differently under state law. Understanding which rule applies where you live or shop matters because it affects what you actually pay at checkout.
Key Takeaways
- Ten states ban credit card surcharges outright: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas.
- Most other states allow surcharges but require merchants to disclose them before you complete the purchase, usually with a sign or notice at the register.
- States that allow surcharges typically cap them at 2 to 5 percent of the transaction amount, though a few states set no limit.
- Surcharges on debit cards are treated differently from credit cards in some states and are banned in others regardless of the card type.
- Merchants who violate surcharge laws in their state can face fines, and you may be able to dispute the charge with your card issuer.
States that ban credit card surcharges entirely
Ten states prohibit merchants from charging a surcharge when you use a credit card: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. In these states, a merchant cannot add an extra fee to your bill based on your payment method, even if they disclose it in advance.
The ban applies to credit cards specifically. Merchants in these states can still offer a discount for paying cash, and they can charge surcharges on other payment methods in some cases — though debit card surcharges are also restricted in several of these states. If you see a surcharge added in one of these ten states, you can dispute it with your card issuer or report it to your state's attorney general.
States that allow surcharges with disclosure requirements
Most states allow merchants to charge a surcharge on credit card purchases, but they require the merchant to tell you about it before you pay. The disclosure must be clear and visible — typically a sign at the register, on the pump (for gas stations), or a notice before you confirm your purchase online.
The timing of disclosure matters. In states like Illinois, Iowa, and Missouri, the merchant must show you the surcharge amount before you complete the transaction. You cannot be charged a surprise fee after you have already committed to the purchase. If a merchant charges a surcharge without disclosing it first, you can dispute the charge with your card issuer as an unauthorized or fraudulent transaction.
States that cap surcharge amounts
Many states that allow surcharges also set a maximum percentage the merchant can charge. The most common cap is 2 to 3 percent of the transaction total, though some states permit up to 5 percent. A few states set no limit at all, leaving the surcharge amount entirely to the merchant's discretion.
| Cap Level | Example States |
|---|---|
| 2% cap | Georgia, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming |
| 3% cap | Alaska, Arizona, Arkansas, Delaware, Illinois, Iowa, Maryland, New Jersey, Rhode Island, Wyoming (some transactions) |
| 5% cap | Alabama, Mississippi (some merchants) |
| No state cap | A few states allow merchants to set their own limit, though card networks like Visa and Mastercard may impose their own rules |
If you are charged a surcharge that exceeds your state's cap, you can dispute it with your card issuer. Keep your receipt and note the surcharge amount and date. Your card issuer can investigate whether the merchant violated state law.
How debit card surcharges are treated differently
Debit cards are often treated separately from credit cards under state surcharge law. Some states that ban credit card surcharges also ban debit card surcharges. Others allow surcharges on debit cards even though credit card surcharges are prohibited.
Federal law (the Durbin Amendment) restricts debit card surcharges for banks and large payment processors, but state law can be stricter. California, Connecticut, Florida, and a few other states ban debit card surcharges outright. In states that allow them, the disclosure and cap rules are usually the same as for credit cards. When you pay with a debit card, check your receipt to confirm the surcharge amount matches your state's rules.
What to do if you are charged an illegal surcharge
If you believe a merchant charged you a surcharge that violates your state's law, your first step is to contact your card issuer's dispute department. Explain that the surcharge was either not disclosed, exceeded your state's cap, or was charged in a state where surcharges are banned. Provide your receipt and the transaction date.
Your card issuer will investigate and may reverse the charge within 10 to 30 days. If the dispute is resolved in your favor, the merchant will be charged back and may face penalties from the card network. You can also file a complaint with your state's attorney general or consumer protection office. Many states investigate merchant violations and can impose fines or require the merchant to refund affected customers.
How surcharge laws affect online and mobile payments
Online and mobile payments are subject to the same surcharge laws as in-person transactions. A merchant operating in a state that bans surcharges cannot charge one online, even if the merchant is based elsewhere. The rule that applies is the law of the state where the merchant is located or where the transaction is processed.
For online purchases, the surcharge disclosure must appear before you confirm your order — typically on the checkout page or in the order summary. If you see a surcharge added after you have submitted your payment information, you can dispute it with your card issuer. Mobile payment apps like Apple Pay or Google Pay do not change the surcharge rules; the merchant's state law still applies.
Frequently Asked Questions
Can a gas station charge me a surcharge for using a credit card?
It depends on your state. Gas stations in states that ban surcharges (California, Florida, New York, Texas, and others) cannot charge one. In states that allow surcharges, the station must post a sign at the pump or at the register before you pay. If you do not see a disclosure, you can dispute the charge.
Is a surcharge the same as a convenience fee?
No. A surcharge is a fee for using a specific payment method (usually credit cards). A convenience fee is charged for using a particular service, like paying online or by phone instead of in person. Convenience fees are treated differently under state law and are generally allowed in more states than surcharges.
What if a merchant charges a surcharge in a state where it is banned?
You can dispute the charge with your card issuer and report the merchant to your state's attorney general. Many states investigate violations and can fine merchants or require them to refund customers. Keep your receipt as proof of the surcharge.
Do surcharge laws explore to business credit cards?
Yes. Surcharge laws explore to all credit card transactions, including those made with business cards. The merchant cannot charge a surcharge in a state where they are banned, regardless of whether the card is personal or business.
Can a merchant charge a surcharge if they disclose it in their terms and conditions?
No. Disclosure in fine print or terms and conditions is not sufficient. The merchant must disclose the surcharge at the point of sale — on a sign at the register, on the pump, or on the checkout page — before you complete the transaction. Hidden disclosures do not meet state law requirements.