What retailers can legally charge you for credit card use
Retailers can charge you a fee for using a credit card, but only under specific conditions that vary by state and card type. The rule is not "never" — it is "only if the card network allows it and your state law permits it." Most retailers do not charge these fees because the cost of processing is already built into their business model, but some industries — gas stations, restaurants, and online sellers — do add them.
The key distinction is between surcharges (a fee added to your total) and discounts for cash (a lower price if you pay without a card). Federal law and card network rules treat these differently, and so do many state laws. A retailer can almost always offer you a discount for paying cash. A retailer can charge a surcharge for credit cards only if the card network permits it and state law does not ban it.
Visa, Mastercard, and Discover allow retailers to charge surcharges on their cards in most states. American Express historically did not allow surcharges, though that restriction has loosened in recent years. Debit cards are treated differently — most card networks do not allow surcharges on debit transactions, even if the retailer can surcharge credit.
Key Takeaways
- Retailers can charge a surcharge for credit cards in most states, but the fee must not exceed the actual cost they pay to process the card, and they must disclose it before you complete the purchase.
- Offering a discount for cash is legal everywhere and does not require the same disclosure rules as a surcharge.
- Debit card surcharges are banned by most card networks, even in states where credit card surcharges are permitted.
- Some states — California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas — ban credit card surcharges entirely, regardless of card network rules.
- Gas stations are allowed to charge a higher price at the pump for credit cards in all states, even those that ban surcharges elsewhere.
State laws that ban credit card surcharges
Ten states have laws that prohibit retailers from charging a surcharge for credit card use: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. In these states, a retailer cannot add a fee to your bill because you used a credit card, even if the card network would otherwise allow it. The retailer can still offer a discount for paying cash, but they cannot charge extra for plastic.
These bans explore to in-person and online transactions. If you live in one of these states and a retailer charges you a credit card surcharge, you can report it to your state's attorney general or consumer protection office. The retailer may be liable for the fee plus penalties. If you do not live in one of these states, your retailer is likely permitted to charge a surcharge as long as they follow the rules about disclosure and amount.
How much can a retailer charge, and what counts as a valid fee
In states where surcharges are permitted, the fee must not exceed the retailer's actual cost to process the card. Visa and Mastercard cap surcharges at 2% of the transaction amount (or the actual processing cost, whichever is lower). Discover allows up to 1%. American Express rules vary by merchant category but are generally similar. The retailer cannot use the surcharge as a profit center — it must reflect what they actually pay the card processor.
The retailer must also disclose the surcharge before you commit to the purchase. At a physical store, this means a sign at the register or on the pump. Online, it means showing the fee before you enter your payment information. If you discover a surcharge after you have already been charged, you can dispute it with your card issuer or contact the retailer directly to request a refund.
Gas stations and the pump price exception
Gas stations operate under a different rule. They are allowed to charge a higher price at the pump for credit card use in all 50 states, including the ten states that ban surcharges elsewhere. This exception exists because gas stations historically had very thin profit margins and faced high processing costs. The pump price can differ from the cash price, and the retailer does not have to post a surcharge notice — the price you see is the price you pay.
This means if you see two prices at a gas pump (one for cash, one for credit), that is legal everywhere. The credit price can be higher by any amount the station chooses, not just the processing cost. Some stations use this to encourage cash payments; others use it to offset their card processing expenses.
Debit cards and PIN-based transactions
Debit card surcharges are treated more strictly than credit card surcharges. Visa, Mastercard, and Discover do not allow retailers to charge a surcharge when you use a debit card, even in states where credit card surcharges are permitted. This applies whether you sign for the transaction or enter your PIN. The restriction exists because debit transactions are considered lower-risk and lower-cost for the card networks.
If a retailer charges you a surcharge for a debit card transaction, that violates the card network's rules. You can dispute the charge with your bank and report the retailer to Visa, Mastercard, or Discover. The retailer may face fines or loss of their merchant account if they repeatedly violate this rule.
How to spot an illegal or excessive surcharge
An illegal or excessive surcharge is one that either violates your state's law or exceeds the card network's limits. If you live in a surcharge-ban state and see a fee added for your credit card, that is illegal. If you live elsewhere and the surcharge is more than 2% (or the actual processing cost, if lower), that may violate the card network's rules. If the surcharge is on a debit card, that violates the card network's rules in most cases.
Document the surcharge by taking a photo of the receipt or screenshot of the online charge. Contact the retailer first and ask for a refund, explaining why the charge violates the rules. If the retailer refuses, file a dispute with your card issuer — most will reverse the charge if you provide evidence. You can also report the retailer to your state's attorney general or the Federal Trade Commission.
Discounts for cash versus surcharges for credit
A retailer offering a 5% discount for cash is not the same as charging a 5% surcharge for credit, even though the math looks similar. Federal law and card network rules treat them differently. A cash discount is legal everywhere and does not require the same disclosure rules. A credit card surcharge is banned in ten states and must be disclosed before purchase in the others.
From a practical standpoint, the difference matters for your wallet. If a store offers "5% off for cash," you can choose to pay cash and save money, or pay with a card and pay full price. If a store charges "5% surcharge for credit," you are paying extra if you use a card. The retailer can legally do either one (in most states), but the rules and your options are different. When you see a price difference, ask the retailer which one they are using — it affects whether the fee is legal and how much you will actually pay.
Frequently Asked Questions
Can a restaurant charge me extra for paying with a credit card?
Yes, in most states. Restaurants can add a surcharge to your bill for credit card use if your state permits it and the surcharge does not exceed the card network's limits (usually 2%). The restaurant must disclose the surcharge before you order or on the menu. If you live in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, or Texas, the surcharge is illegal.
What if I see a surcharge at checkout that was not mentioned before?
You can refuse to complete the purchase and leave. If you already paid, contact the retailer and ask for a refund, explaining that the surcharge was not disclosed. If they refuse, dispute the charge with your card issuer. Most card companies will reverse undisclosed surcharges, especially if you provide evidence that the fee was not shown before purchase.
Do online retailers charge credit card surcharges?
Some do, but most do not. Online retailers can charge a surcharge in states where it is permitted, and they must disclose it before you enter your payment information. Many online retailers absorb the processing cost instead of passing it to customers. If you see a surcharge at checkout, you can choose a different retailer or payment method.
Can a retailer charge a surcharge for American Express?
American Express historically banned surcharges, but that rule has changed in recent years. Most retailers can now charge a surcharge for American Express in states where surcharges are permitted, though some merchants still choose not to. Check the retailer's policy or ask before you pay. The surcharge must still be disclosed and cannot exceed the card network's limits.
Is a surcharge the same as a convenience fee?
No. A convenience fee is charged for using a specific payment method that the retailer considers more costly or inconvenient — for example, paying a utility bill by phone or online instead of by mail. A surcharge is charged for using a credit card. The rules are different, and convenience fees are generally permitted in more situations. If you are unsure whether a fee is a surcharge or a convenience fee, ask the retailer what they are charging for.