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 business can charge you extra for using a credit card is legal in most of the United States — but not everywhere, and not for every type of card. The answer hinges on two things: the card network's own rules and your state's laws. Visa, Mastercard, American Express, and Discover each have different policies about surcharges. Some states ban them outright. Others allow them only under specific conditions. A few states cap how much a merchant can charge.
The fee itself is called a surcharge when the merchant adds it to your bill because you chose to pay with plastic. This is different from a convenience fee, which some businesses charge for the privilege of paying by card at all (like paying a utility bill online instead of by check). The legal status of each is separate.
Key Takeaways
- Visa and Mastercard allow surcharges up to 4 percent of the transaction, but American Express and Discover have stricter rules or ban them entirely.
- Ten states — California, Colorado, Connecticut, Florida, Kansas, Maine, New York, Oklahoma, Texas, and Puerto Rico — prohibit credit card surcharges by law.
- Some states allow surcharges only on credit cards, not on debit cards or prepaid cards, so the same merchant may charge you for one but not the other.
- A merchant must disclose the surcharge before you complete the transaction, not after you swipe or tap your card.
- Debit card surcharges are treated differently than credit card surcharges in many states and are often banned where credit card surcharges are allowed.
What Visa and Mastercard allow
Visa and Mastercard permit merchants to charge a surcharge, but they cap it at 4 percent of the transaction total or the actual cost of processing the transaction — whichever is lower. This means a merchant cannot charge you 5 percent just because they feel like it; they must be able to justify the amount based on what the card network actually costs them.
The merchant must also display the surcharge amount clearly before you pay. If you are buying something for $100 and the surcharge is 3 percent, you should see "$103.00 total" before you hand over your card. Hiding the fee until after the transaction is complete violates both the card network rules and consumer protection laws in most states.
Visa and Mastercard also require that the surcharge be the same percentage for all credit cards within their network. A merchant cannot charge 3 percent for Visa and 4 percent for Mastercard. The rate must be uniform.
American Express and Discover rules
American Express and Discover take a harder line. American Express has historically prohibited surcharges altogether, though this policy has been challenged in court and varies by state. Discover's policy is similarly restrictive in most cases. If a merchant wants to charge a surcharge, they need to check Amex and Discover's current terms, because these networks do not follow the same 4 percent rule as Visa and Mastercard.
In practice, many merchants who charge surcharges do so only for Visa and Mastercard, leaving Amex and Discover customers unaffected. This is legal under the card networks' rules, though it can feel unfair to the customer.
States that ban credit card surcharges entirely
Ten states and one U.S. territory have made credit card surcharges illegal: California, Colorado, Connecticut, Florida, Kansas, Maine, New York, Oklahoma, Texas, and Puerto Rico. In these places, a merchant cannot charge you extra for using a credit card, period. The card network rules do not override state law.
If you live in one of these states and a merchant tries to charge you a surcharge, you can refuse to pay it. The merchant's only legal option is to not accept that card at all — they cannot force you to pay extra for using it. Some merchants in these states work around the ban by offering a discount for paying cash instead, which is legal because it is framed as a reduction rather than a surcharge.
Debit cards and prepaid cards are treated differently
Many states that allow credit card surcharges ban surcharges on debit cards and prepaid cards. This is because debit and prepaid transactions are regulated differently — they fall under different federal rules and often cost merchants less to process. A merchant might legally charge you 3 percent for using a Visa credit card but cannot charge you anything for using a Visa debit card, even though both run on the Visa network.
The distinction matters because you might see a surcharge listed as "credit card fee" rather than "card fee." If you pull out a debit card instead, the merchant should remove the charge. If they do not, that is a violation of the rules in most states.
How merchants must disclose the surcharge
A merchant must tell you about the surcharge before you commit to the purchase. This means the fee should appear on the receipt or invoice before you swipe, tap, or insert your card. Online, it should show up before you click "confirm payment." On the phone, the merchant should state it before you give your card number.
Posting a sign at the register that says "3 percent credit card surcharge" is not enough in most states. The surcharge must be itemized on your receipt or bill so you see the exact dollar amount you are paying. Some states also require the merchant to post the surcharge policy in a conspicuous place — not hidden in fine print — so customers know about it before they reach the register.
If a merchant charges you a surcharge without disclosing it first, you can dispute it with your credit card company. Most card networks will side with you and reverse the charge, then investigate the merchant.
Convenience fees versus surcharges
A convenience fee is different from a surcharge and is legal in most places. A convenience fee is what a business charges for the convenience of paying in a certain way — like paying a property tax bill online instead of by mail, or paying a parking ticket by phone instead of in person. The fee is for the service of accepting payment that way, not specifically because you used a credit card.
Convenience fees are generally legal even in states that ban surcharges, because they are not tied to the card type. However, some states have rules about how large a convenience fee can be, and some require disclosure just like surcharges do. If you are unsure whether a fee is a surcharge or a convenience fee, look at whether the business charges it only for card payments or for all non-standard payment methods.
What to do if you are charged an illegal surcharge
If you believe you have been charged a surcharge that violates your state's law or the card network's rules, you have several options. First, ask the merchant directly whether the charge is legal in your state. Many small businesses are not aware of the rules and will remove the charge if you point it out.
If the merchant refuses, contact your credit card company and dispute the charge. Provide the merchant's name, the date of the transaction, and an explanation that the surcharge was not disclosed or violates your state's law. The card company will investigate and typically reverse the charge within 30 to 60 days.
You can also file a complaint with your state's attorney general or consumer protection office. These agencies track complaints about surcharges and can take action against merchants who repeatedly violate the rules.
Frequently Asked Questions
Can a gas station charge me extra for using a credit card instead of a debit card?
Yes, in most states. Gas stations are among the most common merchants to charge surcharges. However, 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 another state that bans surcharges, the station cannot charge you extra. If you use a debit card, many states prohibit the surcharge even where credit card surcharges are legal.
Is a surcharge the same as a tip?
No. A tip is optional and goes to the worker or business as a gratuity. A surcharge is mandatory and is presented as a fee for processing the card. You cannot refuse a surcharge the way you can refuse to tip. If a business presents a surcharge as optional or suggests it is a tip, that is misleading and may violate consumer protection laws.
Can a restaurant charge me a surcharge if I pay with a credit card?
It depends on your state and the card network. In states that allow surcharges, a restaurant can charge you 3 to 4 percent extra for using Visa or Mastercard, but the charge must be printed on the menu or disclosed before you order. American Express and Discover have stricter rules. In states that ban surcharges, restaurants cannot charge you extra no matter which card you use.
What if a merchant charges a surcharge but does not disclose it until after I pay?
Dispute it with your credit card company when ready. The merchant violated the disclosure rule, which is required by both the card networks and most state laws. Your card company will likely reverse the charge and may flag the merchant for repeated violations.
Can a business charge a surcharge on online purchases?
Yes, if the surcharge is disclosed before you complete the purchase. Online merchants must show the surcharge amount on the checkout page before you click "confirm" or "pay now." If the surcharge appears only after you have submitted your payment information, that is a violation and you can dispute it.