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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
RBC Cash Back Mastercard
N/A
Up to 2% cash back
19.99%
$0
Min. recommended credit score: 650
Get 2% cash back on grocery store purchases, and up to 1% cash back on all other qualifying purchases and pre-authorized payments.
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.
Tangerine World Mastercard
15% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn 15% cash back (up to $150) when you spend $1,000 in the first 2 months Until January 31, 2023. Plus, get a 1.95% interest rate on balance transfers for the first 6 months.
RBC Avion Visa Infinite
55,000 points
Up to 1 point per $1 spent
19.99%
$120
Min. recommended credit score: 650
Get up to 55,000 Welcome Points. Get 35,000 points on approval and 20,000 bonus points when you spend $5,000 in your first 6 months. Apply by January 31, 2023.
OFFER
Tangerine Money-Back Credit Card
15% cash back
Up to 2% cash back
19.95%
$0
Min. recommended credit score: 600
Earn 15% cash back (up to $150) when you spend $1,000 in the first 2 months Until January 31, 2023. Plus, get a 1.95% interest rate on balance transfers for the first 6 months.
EXCLUSIVE
Neo Financial Mastercard
Get $25.00
Average 5% cash back
19.99% - 26.99%
$0
Min. recommended credit score: 600
Get $25 when you sign up for the Neo Financial Mastercard. Plus, earn bonuses like 15% cashback on your first purchase at most partners, and earn an average of 5% cashback at thousands of partners and at least 0.5% cashback guaranteed.
BMO Preferred Rate Mastercard
0.99% rate on balance transfers for 9 months
N/A
12.99%
$0 annual fee for the first year ($20 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 $20 annual fee waived in the first year.
RBC ION+ Visa
12,000 points
3 points per $1 spent
19.99%
$48
Min. recommended credit score: 660
Earn 12,000 Avion points when you get approved for the card. Apply by January 31, 2023.
RBC ION Visa
6,000 points
1.5 points per $1 spent
19.99%
$0
Min. recommended credit score: 660
Earn 6,000 Avion points when you get approved for the card. Apply by January 31, 2023.
American Express Cobalt Card
30,000 points
Up to 5x points per $1 spent
20.99%
$155.88
Min. recommended credit score: 700
Earn up to 30,000 Membership Rewards points in your first year. Earn 2,500 Membership Rewards points for each monthly billing period in which you spend $500 in net purchases on your card (up to 30,000 points). That’s up to $300 towards a weekend getaway or concert tickets.
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