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Guide to credit card surcharges

Everything you need to know about credit card surcharges and how you can avoid them.

Credit cards are convenient, but using them can often cost you more money than other payment options and regular charges, such as interest rates and annual fees, but you may also have to pay a surcharge.

Surcharges are usually transaction-based and can make a big difference to the total transaction cost. Here, we look at when providers charge these fees, how much you can expect to pay and how to avoid credit card surcharges, so you have a payment option that works for you.

What is a credit card surcharge, and when is it applied?

A surcharge is a fee that merchants apply to your transaction to help them cover the cost of accepting a specific payment method.

For example, a business that accepts credit cards is charged a fee for processing these payments. Depending on the card and type of transaction, this fee can range from 0.5% to 3% (or more) of the total transaction cost and is usually paid by the business to its bank. Companies can choose to offset the cost of this fee through their pricing or by applying a surcharge.

Payments that attract a surcharge

While credit cards often attract a surcharge, businesses can apply this fee to a range of different payment methods, including:

  • American Express (credit card, debit card and prepaid)
  • Mastercard (credit card, debit card and prepaid)
  • Visa (credit card, debit card and prepaid)
  • Eftpos (debit and prepaid)

Some businesses also apply a fee for other payment options, such as PayPal. For example, Emirates apply a surcharge for the airfare you buy with a credit card or PayPal.

It’s important to note that any business that includes a surcharge must inform customers before they pay, and they must also provide a fee-free alternative, such as cash or direct deposit.

hand-on-calculatorHow much is a credit card surcharge?

The cost of a surcharge varies depending on factors such as the business and the type of card. The charge is usually between 1% and 3% for credit card surcharges but could be higher in some circumstances.

Booking flights

Booking and service fees are charged per person for each flight booked.

Air New Zealandair-nz-logo

Card typeCharge
Credit card$2.80 for a domestic booking

$7.10 for a Trans-Tasman and Pacific flight

$22.60 for an international booking

Singapore Airlinessingapore-airlines-logo

Card type% charge
Credit card1% to 2% per booking. The airline shows the exact fee before you confirm payment


Card typeCharge
Visa/Mastercard$5 to $12.50 per domestic, Australian, Pacific or International flight


Card type% charge
Credit card, PayPal1.5% per total ticket value (capped at $70)

Paying for a taxi

The surcharge that applies when you use your credit card to pay for a cab varies. Usually, taxi firms charge a fixed fee of about $2 or a percentage of the fare, which the company uses to cover the cost of processing payments.

Credit card surcharges for in-store or online purchase

Remember, any brick-and-mortar or online store that applies a credit card surcharge should notify you before making payment. For example, if you’re shopping in-store, there should be signs at or near the checkout informing you of a surcharge. Online, there is usually a similar notification of a surcharge for specific payment options. Remember, merchants have to provide you with fee-free ways to pay, such as cash or direct deposit.

Other places you may have to pay surcharges

  • Ticket machines. You could have to pay a surcharge when you use your card to pay for parking at a ticket machine.
  • Events. Paying for event or concert tickets may require you to pay a surcharge. However, it’s important to note that surcharge regulations do not affect the “booking fees” applied, regardless of the payment method used.
  • Utilities. Payments towards utilities and other bills can attract surcharges.
  • Government payments. Government bodies may attach a surcharge to credit card payments.
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How to avoid surcharges

While there are some instances where you have no option but to pay a credit card surcharge, here are some ways you can avoid or reduce how much you pay.

  • POLi. With Internet banking enabled on your credit card, you can choose to pay through POLi for airline tickets and more, and you don’t have to pay a surcharge when you use this payment method. Please note, POLi transactions from a credit card could be considered “cash advance transactions” and may attract additional fees as a result. Check with your credit card provider to make sure they allow this payment option from a credit card account.
  • Consider going to other businesses. In some cases, you may be able to shop around to find a merchant that charges reduced or no credit card fees. For example, some taxi companies charge as much as 10% for credit card payments, while Uber doesn’t apply any credit card surcharge and even allows you to link your card through the app for faster payment.
  • Link your card to PayPal. You can link your credit card account to PayPal and then use your PayPal account to make payments if the merchant provides this option as a fee-free alternative.
  • Booking flights with points. When booking flights with Air New Zealand, you can avoid surcharge fees by booking your flight with Airpoints rather than cash. Check with the airline you’re booking with to see if they offer this for other rewards cards points.
  • Vouchers. Some airlines and institutions don’t charge payment fees when using a voucher to make the purchase or booking.
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Frequently asked questions

The surcharge cost depends on a range of factors, including the business, transaction price, and card type. By taking note of when surcharges are applied, using alternative payment options or shopping around for a more affordable product or service, you can avoid or at least reduce credit card surcharges and make paying with plastic more affordable.

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Need a new credit card? Compare your options here

1 - 5 of 34
Name Product Purchase Rate Annual Fee Balance Transfer Rate
American Express Airpoints Platinum Card
19.95% p.a.
Receive 300 bonus Airpoints Dollars when you apply online, are approved and spend a minimum of $1,500 on your new card within the first 3 months of membership. This offer is available to new Card Members only. T&Cs apply. You will also earn 1 Airpoints Dollar for every $59 you spend on your card.
American Express Airpoints Card
0% for 6 months (changes to 19.95% p.a.)
Be rewarded with 50 bonus Airpoints Dollars. Simply apply, be approved and spend $750 on your new Card within the first 3 months of membership. This offer is available to new Card Members only.
American Express Gold Rewards Card
19.95% p.a.
Receive $200 credit when you apply online, are approved and spend $1,500 on your card within the first 3 months of membership. Offer is available to new card members only. T&Cs apply. You will also earn 2 Membership Rewards points for every $1 spent on eligible purchases.
The Co-operative Bank Fair Rate Credit Card
12.95% p.a.
0% p.a. for 6 months
0% p.a. on balance transfers for 6 months, plus benefit from a low rate of 12.95% p.a. on both purchases and cash advances.
Q Mastercard
0% for 3 months (changes to 26.69% p.a.)
Get 3 months zero interest and zero payments on every purchase with no minimum spend required. Ts&Cs apply.

Compare up to 4 providers

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