Finder makes money from featured partners, but editorial opinions are our own.

Credit card surcharges fees in Canada

Credit card surcharge fees can now legally be charged in Canada, but there are limits.

You’re paying at the counter with your credit card. The merchant says, “Credit card transactions come with an extra charge.” What’s that all about? Depending on the reason, this extra charge could be a service fee or a surcharge. Though it’s annoying and can add on to the cost of your purchase, there’s a reason merchants add it: to cover credit or debit card processing costs.

Let’s take a look at the difference between service fees and surcharges below, plus find out if and when merchants can charge them.

Yes, as of October 6, 2022, it is legal to charge customers for credit card fees in Canada. Merchants can now charge customers to cover the credit card fees that card issuers, like Visa and Mastercard, charge merchants to process purchases.

What are credit card surcharge fees?

Credit card surcharge fees are an extra cost that credit car companies, like Visa and Mastercard, charge merchants every time they process a credit card payment. These fees can run anywhere from 1% to 3%. In the past, merchants absorbed that cost as an extra business expense. However, as a result of a recent class action lawsuit against Visa, Mastercard and several banks, merchants can now directly charge customers that surcharge fee, so they no longer have to soak up the cost themselves.

How do credit card surcharge fees work in Canada?

There are certain restrictions on how Canadian merchants can charge credit fees to customers. As of now, merchants must follow these guidelines when charging credit card surcharges fees in Canada:

  • The credit card surcharge must be cannot be higher than 2.4%
  • Merchants cannot charge surcharge fees in addition to service or convenience fees
  • Merchants cannot charge more for a surcharge fee than it costs them to accept the card

Additionally, merchants must clearly show that they are charging a credit card surcharge fee at the point of sale, in store, online, at the entrance of physical stores and on every receipt

Can merchants charge different surcharge fees for different cards?

Merchants in Canada can choose to set surcharge fees based either on the credit card’s brand or on the type of card (e.g. standard vs. premium card), but they can’t charge different fees based on brand and card type.

That means that a store could choose to charge a different surcharge fee for all Visa cards compared to all Mastercard cards. The other option is for a store to charge a different surcharge fee for all premium cards compared to standard cards, regardless of the credit card company the card comes from.

Compare credit cards

Name Product Welcome Offer Rewards Purchase Interest Rate Annual Fee Min. Credit Score Description
OFFER
Tangerine Money-Back Credit Card
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn 10% cash back (up to $100) when you spend $1,000 in the first 2 months. Valid until January 31, 2024. Plus, get a 1.95% interest rate on balance transfers for the first 6 months.
RBC Cash Back Mastercard
0.99% for 10 months balance transfer + cash advance offer
Up to 2% cash back
20.99%
$0
Min. recommended credit score: 650
Get a 0.99% introductory interest rate for the first 10 months on balance transfers and cash advances. Apply by December 6, 2023.
BMO CashBack Mastercard
5% cash back
Up to 3% cash back
20.99%
$0
Min. recommended credit score: 660
Get 5% cash back on all eligible purchases in the first three months of card membership (up to max. spend of $2,500). Plus, get a rate of 0.99% on balance transfers for 9 months. A 2% fee applies to transferred balances.
OFFER
Tangerine World Mastercard
10% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn 10% cash back (up to $100) when you spend $1,000 in the first 2 months. Valid until January 31, 2024. Plus, get a 1.95% interest rate on balance transfers for the first 6 months.
RBC Avion Visa Infinite
35,000 points
Up to 1 point per $1 spent
20.99%
$120
Min. recommended credit score: 650
Get up to 35,000 Welcome Points. Apply by January 21, 2024.
American Express Cobalt Card
15,000 points
Up to 5x points per $1 spent
20.99%
$155.88
Min. recommended credit score: 700
Earn up to 15,000 Membership Rewards points in your first year. Earn 1,250 Membership Rewards points for each monthly billing period in which you spend $750 in purchases. That’s up to $150 towards a weekend getaway or concert tickets.
RBC ION+ Visa
7,000 points
3 points per $1 spent
20.99%
$48
Min. recommended credit score: 660
Get up to 7,000 welcome points. Get 3,500 points on approval and earn 3,500 bonus points when you spend $500 in your first 3 months.
BMO Preferred Rate Mastercard
0.99% rate on balance transfers for 9 months
N/A
13.99%
$0 annual fee for the first year ($29 thereafter)
Min. recommended credit score: 660
Get a rate of 0.99% on balance transfers for 9 months with a 2% transfer fee. Plus, get the $29 annual fee waived in the first year.
RBC ION Visa
3,500 points
1.5 points per $1 spent
20.99%
$0
Min. recommended credit score: 660
Get 3,500 Avion points when you get approved for the card. Plus, get a 0.99% interest rate on cash advances and balance transfers for the first 10 months. Apply by December 6, 2023.
American Express Green Card
10,000 points
1 point per $1 spent
20.99%
$0
Min. recommended credit score: 700
Earn a Welcome Bonus of 10,000 Membership Rewards points when you charge $1,000 in purchases to your card in the first 3 months as a new Cardmember. That’s $100 towards groceries or concert tickets.
loading

Frequently asked questions about credit card surcharge fees

More guides on Finder

Ask an Expert

You must be logged in to post a comment.

Go to site