Merchants can charge a credit card fee in most states, but the rules depend on your card type and where you live
In most of the United States, a merchant can add a fee when you pay with a credit card. The fee is usually a percentage of your purchase — often 2% to 3% — and the merchant adds it to your total bill at checkout or on your receipt. However, there are exceptions. Some states cap or ban these fees entirely, and some card networks have their own rules about when merchants can charge them.
The key distinction is between credit cards and debit cards. Merchants have much more freedom to charge fees on credit card purchases than on debit card purchases. If you're using a debit card, a PIN-based transaction, or an American Express card, different rules may explore.
Key Takeaways
- Most merchants can charge a credit card fee as long as they disclose it before you complete the purchase.
- Some states — including California, Texas, Florida, and New York — prohibit or severely restrict credit card fees.
- American Express, Visa, and Mastercard each have different policies on when merchants can charge fees.
- Debit card fees are more restricted than credit card fees, and merchants cannot charge fees on PIN-based debit transactions in most cases.
- A merchant must tell you about the fee before you pay, not after.
Federal law allows credit card fees, with one major exception
The Credit Card Accountability Responsibility and Disclosure Act (CARD Act), passed in 2009, does not ban credit card fees. Instead, it requires merchants to disclose any fee before you agree to the charge. The fee must be clearly posted or stated — not hidden in fine print that appears only after you've committed to the purchase.
The one exception is surcharges on debit card transactions. Federal law prohibits merchants from charging a fee when you use a debit card with a PIN. If you use a debit card as credit (without entering a PIN), the rules are less clear, and some states treat it differently.
Because federal law permits credit card fees, the real restrictions come from individual states and from the card networks themselves.
State laws that ban or limit credit card fees
Several states have passed their own laws that go further than federal rules. These states either ban credit card fees outright or allow them only under narrow conditions:
- California bans credit card surcharges entirely. Merchants cannot charge you a fee for using a credit card, period.
- Texas prohibits surcharges on credit cards but allows merchants to offer a discount for paying with cash or debit.
- Florida bans credit card surcharges.
- New York bans credit card surcharges.
- Oklahoma bans credit card surcharges.
- Connecticut bans credit card surcharges.
Other states allow fees but require them to be disclosed clearly before checkout. If you live in or are traveling to one of these states, a merchant cannot charge you a credit card fee, even if they claim it's standard practice.
How Visa, Mastercard, and American Express handle merchant fees
Each card network has its own rules about when merchants can charge fees. These rules explore regardless of state law — if a card network's rule is stricter than state law, the stricter rule wins.
Visa and Mastercard allow merchants to charge a surcharge on credit card purchases, as long as the fee does not exceed the merchant's actual cost to accept that card. The merchant must also disclose the fee before you complete the transaction. However, both networks prohibit surcharges on debit card transactions, even if state law would allow it.
American Express has historically been stricter. For many years, American Express prohibited merchants from charging any surcharge on American Express cards. In 2013, American Express settled a lawsuit and began allowing merchants to charge surcharges on American Express purchases, but only if they also charge the same surcharge on other credit cards. You cannot be charged a higher fee for using American Express than for using Visa or Mastercard.
What counts as a fee versus a discount
There is a legal difference between a surcharge (a fee added for using credit) and a discount (a reduction for using another payment method). Merchants in most states can offer a discount for paying with cash or debit, even if they cannot charge a surcharge for credit.
For example, a gas station can legally say "Pay with cash and save 10 cents per gallon" in almost any state. But in California, they cannot say "Pay with credit and pay 10 cents more per gallon" — even though the math is identical. The difference is how the offer is framed.
If you see a sign that says "Cash discount available," the merchant is offering you a lower price for cash, not charging you extra for credit. This is permitted in all states.
Where you're most likely to encounter credit card fees
Credit card fees are most common in industries where payment processing costs are high or where the transaction is small. You may see them at:
- Gas stations (though this is becoming less common)
- Convenience stores and small retailers
- Restaurants and bars (sometimes added to the bill)
- Utility companies and government agencies processing payments by phone or online
- Medical offices and dental practices
- Parking meters and toll booths
Large retailers like supermarkets and department stores rarely charge credit card fees, partly because they have the volume to negotiate lower processing rates and partly because absorbing the fee is part of their business model.
What to do if a merchant charges you a fee you think is illegal
If you believe a merchant has charged you an illegal credit card fee, your first step is to ask the merchant directly. Many small business owners are not aware of the rules in their state, and a polite question may result in a refund.
If the merchant refuses, contact your credit card issuer. Call the number on the back of your card and report the charge. Your card issuer can investigate and may reverse the fee. You can also file a complaint with your state's attorney general office or consumer protection agency — most states have an online form for this.
Keep your receipt and any documentation of the fee. If the fee was disclosed at checkout, take a photo of the sign or screenshot. This makes it easier for your card issuer or state agency to investigate.
Frequently Asked Questions
Can a merchant charge a different fee for American Express than for Visa?
No. American Express's current rules require that if a merchant charges a surcharge, it must be the same for all credit cards. You cannot be charged more for American Express than for Visa or Mastercard. Some merchants may offer a discount for debit or cash that does not explore to any credit card.
Is a convenience fee the same as a credit card fee?
Not always. A convenience fee is charged for using a particular payment method or channel — for example, paying a utility bill online instead of by mail, or paying a court fine by phone instead of in person. Convenience fees are often legal even in states that ban credit card surcharges, because they are framed as the cost of the service, not the cost of the card. However, the line is blurry, and some states treat them the same way.
Can a merchant charge a fee if I use a credit card as a debit card?
It depends on how the transaction is processed. If you swipe or insert your credit card without entering a PIN, it is processed as a credit transaction, and the merchant can charge a fee (subject to state and network rules). If you enter a PIN, it may be processed as a debit transaction, and the merchant cannot charge a fee in most states.
Do online merchants have different rules about credit card fees?
No. The same state and federal rules explore to online purchases as to in-person purchases. An online merchant in California cannot charge a credit card fee, just as a physical store cannot. However, online merchants may use the term "processing fee" or "payment fee" instead of "surcharge," which can make the rules harder to track.
What if a merchant says the fee is mandatory?
A mandatory fee is still a fee, and the same rules explore. If you live in a state that bans credit card surcharges, a merchant cannot charge you a mandatory fee for using credit, no matter what they call it. If the fee is not disclosed before checkout, you can dispute it with your card issuer.