Merchants can charge a credit card fee in most states, but the rules depend on which card network you use and where you live
Whether a store or service can charge you extra for paying with a credit card is not a straightforward yes or no. The answer depends on the card network (Visa, Mastercard, American Express, Discover), your state's laws, and what the merchant is actually charging for. A merchant cannot charge you a fee just for using Visa or Mastercard, but they can charge a surcharge in most states if they follow specific rules. American Express and Discover have stricter rules that ban surcharges almost entirely.
The key distinction is between a surcharge (a fee added because you chose credit) and a discount (a lower price for paying a different way, like cash). Both are legal in most places, but they are treated differently under card network rules and state law.
Key Takeaways
- Visa and Mastercard allow merchants to charge a surcharge for credit card payments in most states, but the fee cannot exceed the merchant's actual cost to accept the card.
- American Express and Discover prohibit surcharges almost entirely, though merchants can offer discounts for other payment methods.
- California, New York, Texas, Florida, and Oklahoma ban credit card surcharges outright, even for Visa and Mastercard.
- A merchant must disclose the surcharge before you complete the transaction, and the fee must be clearly labeled as a surcharge, not hidden in the total price.
- If a merchant violates these rules, you can dispute the charge with your card issuer or file a complaint with your state's attorney general.
What Visa and Mastercard allow merchants to charge
Visa and Mastercard permit merchants to add a surcharge to credit card transactions, but only under strict conditions. The surcharge cannot exceed the merchant's actual cost to process the card payment — typically 2 to 3 percent, though it varies by merchant category and card type. The merchant cannot charge a surcharge on debit cards, prepaid cards, or any Visa or Mastercard product marketed as a debit card.
The merchant must also disclose the surcharge before you agree to pay. This means the fee must appear on the receipt or invoice before you swipe, insert, or tap your card. If you are shopping online, the surcharge must be shown before you reach the final checkout page. The merchant must also label it clearly as a "surcharge" — they cannot bury it in the total or call it something else.
Even where Visa and Mastercard rules allow a surcharge, your state law may override them. Five states ban surcharges entirely, regardless of what the card networks permit.
American Express and Discover rules on surcharges
American Express and Discover take a harder line than Visa and Mastercard. Both networks prohibit merchants from charging a surcharge for using their cards, period. This ban applies in every state, even in states where Visa and Mastercard surcharges are legal.
However, merchants can still offer a discount for paying with cash, check, or another method. The discount must be the same regardless of which card you use — a merchant cannot offer a 3 percent cash discount and then charge a 3 percent American Express surcharge. The discount also must be clearly advertised before you enter the store or reach checkout.
State laws that ban credit card surcharges
Five states have laws that prohibit merchants from charging a surcharge for any credit card payment, even Visa and Mastercard:
- California
- New York
- Texas
- Florida
- Oklahoma
In these states, a merchant cannot add a fee to your bill because you chose to pay with a credit card. They can still offer a discount for paying with cash or another method, as long as the discount is advertised clearly and applies equally to all payment types.
If you live in one of these states and a merchant charges you a surcharge, the charge violates state law. You can dispute it with your card issuer or report it to your state's attorney general office.
The difference between a surcharge and a discount
A surcharge is a fee added to the price because you chose credit. A discount is a lower price offered for choosing a different payment method. Both are legal in most places, but they are not the same thing.
A merchant offering a 3 percent cash discount is legal almost everywhere. A merchant charging a 3 percent credit card surcharge is legal in most states but banned in California, New York, Texas, Florida, and Oklahoma. The math looks the same to you, but the legal treatment is different.
Merchants sometimes blur this line by advertising a "cash price" and a "card price." If the card price is higher, that is a surcharge, and the same rules explore. If the cash price is lower, that is a discount, and different rules explore. The label does not matter — what matters is which price is the baseline.
How to spot an illegal surcharge and what to do about it
An illegal surcharge usually appears as an unexpected line item on your receipt or final bill. You might see it labeled as a "credit card fee," "card processing fee," "convenience fee," or "service charge." If you live in one of the five states that ban surcharges, any such fee is illegal. If you live elsewhere, the fee is illegal only if it exceeds the merchant's actual processing cost (which you usually cannot verify) or if it was not disclosed before you completed the transaction.
If you believe you were charged an illegal surcharge, start by disputing the charge with your card issuer. Call the number on the back of your card and explain that you were charged a fee that violates card network rules or state law. Your issuer will investigate and may reverse the charge. Keep your receipt as proof.
You can also file a complaint with your state's attorney general office, which oversees merchant practices and can take action against repeat violators. Many states have a consumer protection division that handles credit card disputes.
Surcharges at gas pumps and other specific locations
Gas stations and ATM operators have different rules. A gas station can charge a surcharge for paying at the pump with a credit card, even in states that ban surcharges for other merchants. The surcharge must still be disclosed before you complete the transaction — usually on a sign at the pump or on the pump screen itself.
ATM operators can charge a fee for withdrawing cash, but this is not a credit card surcharge — it is a service fee for using the machine. The fee applies whether you use a debit card, credit card, or any other payment method. ATM fees are not regulated by card networks and are subject only to state law and the ATM operator's own policies.
Convenience fees at ticketing websites, parking apps, and similar services are also treated differently. These are fees for the convenience of using an online or mobile service, not surcharges for the card itself. They are legal in most places as long as they are disclosed before checkout.
Frequently Asked Questions
Can a restaurant charge me a credit card fee?
In most states, yes, if the fee is disclosed before you pay and does not exceed the restaurant's actual processing cost. In California, New York, Texas, Florida, and Oklahoma, no — surcharges are banned. If you see a credit card fee on your bill after paying, you can dispute it with your card issuer or ask the restaurant to remove it.
Is a "convenience fee" the same as a credit card surcharge?
No. A convenience fee is charged for using a particular service or payment method (like an online ticketing platform), while a surcharge is charged specifically because you chose a credit card. Convenience fees are legal in most places and are not subject to the same restrictions as surcharges.
What if a merchant charges a surcharge but does not disclose it until after I pay?
That violates Visa and Mastercard rules, which require disclosure before the transaction. Dispute the charge with your card issuer and explain that you were not informed of the fee beforehand. Your issuer should reverse it.
Can a merchant charge different surcharges for different credit cards?
No. Visa and Mastercard rules require that any surcharge be the same for all Visa cards and all Mastercard cards. A merchant cannot charge 2 percent for Visa and 3 percent for Mastercard. American Express and Discover do not allow surcharges at all.
If I pay with a debit card, can the merchant charge a surcharge?
No. Visa and Mastercard rules explicitly prohibit surcharges on debit cards, even if the debit card is branded with the Visa or Mastercard logo. A merchant can only surcharge credit card transactions.