A user's guide to credit card surcharges | August 2018
credit card surcharge fee

A guide to credit card surcharges

We value our editorial independence, basing our comparison results, content and reviews on objective analysis without bias. But we may receive compensation when you click links on our site. Learn more about how we make money.

A credit card surcharge is added on top of a purchase to cover the merchant’s processing fees.

You’re paying at the counter with your credit card. The merchant says, “Credit card transactions come with a $0.35 extra charge.” What’s that all about?

This is called a credit card surcharge. Though it’s annoying, there’s a reason merchants add it: to cover their costs.

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

Credit cards are a form of convenience. Instead of carrying loads of cash or writing checks, you can simply swipe (or dip) a card.

This convenience typically doesn’t cost you anything. Instead, the merchant pays for your convenience. Each time you use your card, they pay a processing fee — typically around 2% of each transaction — to the bank that issued your card.

For the merchant, this processing fee can make it difficult to turn a profit. As a result, they may pass along the cost to you by adding a credit card surcharge. This is an extra fee that’s added onto your transaction.

When will I see a surcharge — and how much will it be?

You’ll rarely see surcharges at large retailers. But you could see them at mom-and-pop establishments, where bottom lines are more sensitive to credit card processing fees.

Merchants should only add a surcharge equal to what it costs them to process a card transaction. According to merchant credit card agreements, card surcharges tend to max out at around 4%.

Credit card surcharges vs. convenience fees

You could be assessed convenience fees when you use a credit card, but they’re not the same thing as surcharges.

A surcharge is a fee that covers the cost of a card transaction. Meanwhile, convenience fees are charged for payment methods that a merchant usually doesn’t accept. For example, a merchant might charge a convenience fee when you pay over the phone instead of online.

Are merchants allowed to add credit card surcharges?

For the most part, merchants aren’t barred by federal or state law from adding surcharges. Whether they can or can’t has more to do with agreements they have with their card processors.

According to the Durbin Amendment of the Dodd–Frank Wall Street Reform and Consumer Protection Act, retailers are allowed to add a surcharge on credit card transactions. They are not allowed to add surcharges on debit card or prepaid card transactions.

Merchants are allowed to require minimum purchases for credit card purchases — up to $10.

Not all merchants can add surcharges

Surcharges are illegal across the board in these states:

  • California
  • Colorado
  • Connecticut
  • Florida
  • Kansas
  • Maine
  • Massachusetts
  • New York
  • Oklahoma
  • Texas

The legality of these states’ surcharge bans may be in question, though. That’s because a March 2017 Supreme Court ruling said these bans can be challenged in courts for impeding merchants’ free speech.

  • California’s surcharge ban was challenged in federal court, and the state is currently disallowed from enforcing it. That’s why you may see retailers adding surcharges, even when it’s technically illegal.
  • The Supreme Court decided against a ruling that upheld New York’s surcharge ban. The case has been sent back to the Second Circuit of the US Court of Appeals.

Time will tell what will come of surcharge bans. Given the Supreme Court’s ruling, these bans are on shaky ground.

Can merchants add surcharges whenever they want?

Merchants are allowed to add surcharges whenever allowed by federal and state law. If they do, however, they must clearly notify customers with conspicuous signage or distinct terms in written agreements before charging customers.

What if a merchant’s surcharge is too high?

Though credit card processors cap surcharges to 4%, merchants often charge a flat fee — such as $0.35 — per card swipe. If you’re paying for something that costs only a few dollars, this flat fee could equate to a large percentage of your purchase. For example, a $0.35 fee on a $5 drink is a 7% surcharge.

Before reporting the merchant to their credit card processor, consider bringing surcharge rules to their attention. Visa has a surcharge guide, as does Mastercard. If you find that surcharges continue to be a problem, you can contact the relevant card processors.

Visa merchant inquiry form

Mastercard “Report a problem shopping” form

How to avoid credit card surcharges

Credit card surcharges can be annoying, and they add up over multiple purchases. Here are a few ways to avoid them.

  • Carry cash. Not all small merchants add surcharges, but retailers are increasingly adopting surcharges to cover processing costs. To avoid the extra fees, use cash. Retailers are technically not allowed to add surcharges on debit transactions, but not all of them know — or choose to follow — the rules.
  • Don’t be afraid to say no. If a merchant adds a surcharge, they must notify you before your purchase.
  • Stop buying from retailers that charge convenience fees. You can always “shop with your feet” by taking your business elsewhere.

Credit card surcharges generally aren’t a big problem in the United States, but they’ve become a significant issue in other countries. Australia passed tough laws against surcharges, for instance, and in July 2017 the UK banned surcharges outright.

In the end, consumer awareness may be the best defense against these fees.

Compare credit cards

Updated August 16th, 2018
Name Product APR for Purchases (Purchase Rate) Intro APR for Balance Transfer Annual Fee
14.74%, 18.74% or 24.74% variable
0% for the first 15 months (then 14.74%, 18.74% or 24.74% variable)
$0
Earn unlimited 1.5% cash rewards on purchases. See Rates and Fees
12.74%, 16.74% or 20.74% variable
0% for the first 18 months from account opening (then 12.74%, 16.74% or 20.74% variable)
$0
An 18-month 0% Intro APR period on both purchases and balance transfers, plus zero foreign transaction fees, makes this is a strong well-rounded card. See Rates and Fees
16.74% variable
0% for the first 15 billing cycles (then 16.74% variable)
$495
Mastercard Black Card members receive an annual $100 air travel credit toward flight-related purchases including airline tickets, baggage fees, upgrades and more.
16.74% variable
0% for the first 15 billing cycles (then 16.74% variable)
$195
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
16.74% variable
0% for the first 15 billing cycles (then 16.74% variable)
$995
Earn points every time you spend. Luxury Card enhances your purchasing power by providing you with one (1) point for every one dollar ($1) you spend. Every purchase gets you closer to the rewards you want.
24.74% variable
$39
Designed to help build credit history with no deposit required and access to benefits.
23.9% variable
$75 annual fee for the first year ($99 thereafter)
With this card you get a 23.9% Variable APR.
19.74% to 25.74% variable
$0 to $99
Get 1% cash back rewards on eligible purchases including gas, groceries, and services such as mobile phone, internet, cable and satellite TV, terms apply.
14.74% to 25.74% variable
0% for the first 15 months (then 14.74% to 25.74% variable)
$0
Earn 10,000 Membership Rewards® Points after you use your new Card to make $1,000 in purchases in your first 3 months.
14.99% to 24.99% variable
0% for the first 12 statement closing dates (then 14.99% to 24.99% variable)
$0
Earn more cash back for the things you buy most.
14.74% to 25.74% variable
0% for the first 15 months (then 14.74% to 25.74% variable)
$0
Earn $200 back after you spend $1,000 in purchases on your new Card in your first 3 months. You will receive the $200 back in the form of a statement credit.
17.74% to 24.74% variable
$0 annual fee for the first year ($95 thereafter)
Earn 50,000 points when you spend $4,000 on purchases within the first 3 months of your account opening, and an additional 30,000 points when you spend a total of $30,000 on purchases within the first year of your account opening.
17.74% to 24.74% variable
$450
Earn 50,000 BONUS POINTS after spending $4,000 on purchases in the first 3 months from account opening* — that's $750 toward travel when you redeem through Chase Ultimate Rewards®.
14.74% to 24.74% variable
0% for the first 12 months (then 14.74% to 24.74% variable)
$95
15,000 Membership Rewards points after you spend $1,000 in the first 3 months of opening your account
16.74% to 25.49% variable
0% for the first 15 months (then 16.74% to 25.49% variable)
$0
Earn unlimited 1.5% cash back on every purchase - it's automatic. No minimum to redeem for cash back.
17.74% to 24.74% variable
$95
Earn unlimited 2 points for every $1 spent on travel and dining purchases and 1.5 points for every $1 spent on all other purchases.
14.74%, 20.74% or 24.74% variable
0% for the first 15 months (then 14.74%, 20.74% or 24.74% variable)
$0
Earn unlimited 1.5% cash back on every purchase, every day
16.74% to 25.49% variable
0% for the first 15 months (then 16.74% to 25.49% variable)
$0
Earn 5% Cash back in bonus categories up to $1,500 every quarter. Earn 1% Cash back on all other purchases.
16.74% to 24.74% variable
$0
20,000 online bonus points offer. Ditch the restrictions of typical airline rewards cards. Any airline, any hotel, anytime. No blackout dates.
16.74% to 25.49% variable
0% for the first 15 months (then 16.74% to 25.49% variable)
$0
Jumpstart your financial fitness! 60 day introductory balance transfer offer, save on interest, and get your free monthly credit score.
14.74%, 21.24% or 24.74% variable
$0 annual fee for the first year ($95 thereafter)
Earn 50,000 bonus miles after spending $3,000 on purchases within the first 3 months from account opening.

Compare up to 4 providers

Frequently Asked Questions

Megan Horner

As the assistant publisher of credit cards at finder.com, Megan is passionate about helping you compare and find the best credit cards for your situation, whether that is earning great rewards or improving your credit score. In her previous position, Megan worked as an assigning editor at Credit Karma, where she focused on editing and publishing educational articles on credit cards. Megan started her career as a writer at a comparison website, so she has a longstanding background in surfacing the best deals and helping people make decisions. In her spare time, Megan likes to hike, camp, surf, and read.

Was this content helpful to you? No  Yes

Ask an Expert

You are about to post a question on finder.com:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our and .

US Credit Card Offers

Important Information*
Deserve® Classic Card
Deserve® Classic Card

APR

24.49
variable

Annual fee

0 For the first year
More info
Luxury Card Mastercard® Gold Card™
Luxury Card Mastercard® Gold Card™

APR

16.74
variable

Annual fee

995 For the first year
More info
First Access Visa Card®
First Access Visa Card®

APR

29.99
variable

Annual fee

75 For the first year
More info
Indigo® Platinum Mastercard® Credit Card
Indigo® Platinum Mastercard® Credit Card

APR

23.9
variable

Annual fee

75 For the first year
More info
Go to site