Merchants can charge a credit card fee in most states, but federal law and card network rules limit how and when
Whether a business can charge you extra for paying with a credit card depends on which card you use, what state you live in, and what the business calls the charge. Federal law allows merchants to pass along the cost of processing your card — but only if they follow specific rules. Visa, Mastercard, American Express, and Discover each have their own restrictions on what merchants can do. Some states add their own rules on top of that.
The short answer: a business can charge a fee for credit cards in most places, but they cannot charge a fee for debit cards, and they must disclose the fee before you pay. The fee also cannot exceed what the merchant actually pays to process the transaction.
Key Takeaways
- Federal law allows merchants to charge a credit card fee as long as they tell you the amount before you complete the purchase.
- Merchants cannot charge a fee for debit card transactions, even if the debit card runs as credit.
- The fee must reflect the actual cost of processing — typically 2 to 3 percent — and cannot be a profit center for the business.
- Visa, Mastercard, American Express, and Discover prohibit merchants from charging different fees for different credit cards from the same network.
- California, Florida, New York, and Texas have additional state-level restrictions on credit card fees.
What federal law says about credit card surcharges
The Credit Card Accountability Responsibility and Disclosure Act (CARD Act) of 2009 set the baseline rule: merchants can charge you a fee for using a credit card, but only if the fee does not exceed the merchant's actual cost to process the card. The Federal Reserve interprets this to mean the fee should match what the merchant pays to their payment processor — usually between 2 and 3 percent of the transaction.
The merchant must also tell you the fee amount before you agree to pay. This means the fee has to appear on the receipt, on a sign at the register, or on the website before checkout. You cannot discover the fee after you have already handed over your card number.
The CARD Act does not set a specific dollar cap or percentage limit — it only says the fee cannot exceed what the merchant actually pays. This means a $100 purchase might carry a $2 fee at one store and a $3 fee at another, depending on their processing costs.
Debit cards are protected differently than credit cards
Merchants cannot charge a fee for debit card transactions at all, even if you run your debit card as credit. This protection comes from the Durbin Amendment, part of the Dodd-Frank Act of 2010. The rule applies to all debit cards issued by banks with more than $10 billion in assets.
If a business tries to charge you a debit card fee, that is a violation of federal law. You should report it to your bank and to the Consumer Financial Protection Bureau (CFPB). The merchant can face penalties and may be required to refund the fee.
The distinction matters because many people use debit cards but do not realize they are protected. If you see a sign that says "credit card fee" or "surcharge," you can still use your debit card without paying it.
What Visa, Mastercard, American Express, and Discover allow
Each card network has its own rules about surcharges, and these rules are often stricter than federal law. Visa and Mastercard historically banned surcharges altogether, though both have loosened their rules in recent years following legal challenges.
As of now, Visa and Mastercard allow merchants to charge a surcharge on credit cards, but the surcharge cannot exceed the merchant's cost to process the card. Both networks also prohibit merchants from charging different surcharge amounts for different cards within the same network — so a Visa card cannot be charged a different fee than another Visa card.
American Express and Discover have similar rules. They allow surcharges but require disclosure and prohibit discrimination between cards on the same network. All four networks prohibit surcharges on debit cards, which aligns with federal law.
State laws that restrict or ban credit card fees
Four states have laws that go beyond federal rules and restrict credit card surcharges more strictly. California, Florida, New York, and Texas either ban surcharges outright or limit them in ways that differ from the federal standard.
California bans credit card surcharges entirely. Merchants cannot charge a fee for paying with a credit card, though they can offer a discount for paying with cash or debit. This is one of the strictest rules in the country.
Florida bans surcharges on credit cards but allows merchants to offer cash discounts. Like California, Florida treats a surcharge and a discount as different things legally.
New York bans surcharges on credit cards, with limited exceptions for certain business types. The rule has been in place since 1984.
Texas bans surcharges on credit cards issued by banks, though surcharges on other types of credit cards may be permitted in some contexts. The rule is narrower than in other states.
If you live in one of these states and a merchant charges you a credit card fee, you can dispute it with your card issuer or report it to your state's attorney general.
How to spot an illegal or excessive credit card fee
An illegal or excessive fee usually shows up in one of three ways: the merchant does not disclose it before you pay, the fee exceeds the merchant's processing cost, or you live in a state where surcharges are banned and the merchant charges one anyway.
If you notice a fee on your receipt that was not disclosed beforehand, contact the merchant first. Many fees are charged by mistake or by staff who do not know the rules. If the merchant refuses to remove it, contact your credit card issuer and dispute the charge. Most card companies will reverse a surcharge that violates their network rules or federal law.
You can also report the merchant to the CFPB at consumerfinance.gov or to your state's attorney general. If the merchant is charging illegal fees to many customers, your report helps build a case for enforcement action.
The difference between a surcharge and a convenience fee
Some merchants use the term "convenience fee" instead of "surcharge," and the two are not always treated the same way legally. A surcharge is a fee for paying with a credit card. A convenience fee is supposed to be a fee for using a particular payment method that is more expensive for the merchant — like paying by phone or online rather than in person.
The distinction matters because some states and card networks allow convenience fees but not surcharges. However, the line between them is blurry. If a merchant charges a "convenience fee" for online credit card payments but does not charge it for in-person payments, that may actually be a surcharge in disguise and could violate the rules.
When you see either term, ask the merchant to explain what the fee covers. If it is purely for using a credit card, it is a surcharge and subject to the rules above. If it is for a specific service — like paying by phone with a representative, or paying a bill after the due date — it may be treated differently.
Frequently Asked Questions
Can a gas station charge me a credit card fee at the pump?
Yes, gas stations can charge a credit card surcharge, and many do. The surcharge must be disclosed before you pump — usually on a sign at the pump or at the register. If you live in California, Florida, New York, or Texas, the surcharge is illegal and you should report it.
What if a restaurant adds a credit card fee to my bill after I have already ordered?
The fee should have been disclosed before you ordered, either on the menu, on a sign, or verbally. If it was not, you can refuse to pay it and ask to speak to a manager. If the restaurant insists, you can dispute the charge with your credit card company.
Can a business charge different fees for Visa versus Mastercard?
No. Visa prohibits merchants from charging different surcharge amounts for different Visa cards, and Mastercard has the same rule. A merchant can charge different fees for credit versus debit, or for American Express versus Visa, but not within the same network.
Is a 5 percent credit card fee legal?
It depends on the merchant's actual processing cost. If the merchant pays 5 percent to their processor, then yes. If they pay 2.5 percent but charge 5 percent, that violates federal law. You can ask the merchant what their processing cost is, though they are not required to tell you.
Can I get a refund if I was charged an illegal credit card fee?
Yes. Contact your credit card company and dispute the charge. Most card companies will reverse surcharges that violate their network rules or federal law. You can also ask the merchant for a refund directly, or file a complaint with your state's attorney general.