Yes, but only in certain situations and only up to a legal limit
A business can charge you a fee for paying with a credit card, but the rules depend on what type of card you're using and what state you live in. For most credit cards, the business can add a surcharge — a percentage added to your bill when you swipe or insert your card. For American Express, Discover, and some other cards, the rules are stricter. The fee cannot exceed the actual cost the business pays to accept that card, and in some states it's banned entirely.
The key distinction is between a surcharge (a fee added because you chose to pay with a card) and a discount (a reduction in price if you pay with cash or another method). Surcharges are legal in most places. Discounts are legal everywhere. A business cannot charge you more for using a card if that card is the only payment method available.
Key Takeaways
- Visa and Mastercard surcharges are legal in most states and can be up to the actual cost the business pays to process the card, typically 2 to 3 percent.
- American Express and Discover surcharges are restricted by the card networks themselves and are often lower or prohibited by state law.
- California, Florida, New York, and Texas ban credit card surcharges entirely, even though federal law permits them.
- A business must disclose the surcharge before you complete the transaction, not after you've committed to the purchase.
- If a business is the only payment option available, they cannot charge a surcharge for using it.
What the law actually says about surcharges
Federal law, set by the Dodd-Frank Act, allows businesses to charge a surcharge on Visa and Mastercard transactions. The surcharge cannot exceed the cost the business actually pays to process the card — usually between 2 and 3 percent, depending on the merchant's agreement with the card network. The business must disclose this surcharge clearly before you complete the purchase, not buried in fine print after you've already decided to buy.
American Express and Discover have their own rules. Amex and Discover prohibit surcharges in their merchant agreements, which means most businesses that accept these cards cannot legally charge you extra for using them. If a business does charge a surcharge on Amex or Discover, you can report it to the card network, and the business can face penalties.
State law overrides federal law when it's stricter. Four states — California, Florida, New York, and Texas — ban credit card surcharges entirely. In these states, a business cannot charge you a surcharge for any credit card, even though federal law would permit it. Other states allow surcharges but may have their own disclosure requirements.
When a business can and cannot charge a fee
A business can charge a surcharge when you have a choice of payment methods. If you can pay with cash, check, or debit card, and you choose to use a credit card instead, the business can add a fee. The surcharge must be disclosed at the point of sale — on the register, on the website before checkout, or on a sign at the counter — before you commit to the purchase.
A business cannot charge a surcharge when the credit card is the only payment method available. If a business accepts only credit cards and no cash or other option, adding a surcharge is illegal under federal law because you have no alternative. Similarly, if you're buying online and the website accepts only credit cards, no surcharge can be added.
A business also cannot charge a surcharge retroactively. If you agree to a price and then the business adds a fee at the register or after you've entered your card information, that violates the disclosure rule. The fee must be known before you decide whether to complete the transaction.
The difference between a surcharge and a convenience fee
A surcharge is a fee added because you chose a particular payment method — usually credit cards. A convenience fee is a fee for using a particular service, like paying a bill online or over the phone instead of in person. Convenience fees are legal in all states and are not subject to the same restrictions as surcharges.
For example, a utility company can charge you a fee to pay your bill online, even if you could pay in person for free. A government office can charge a fee to pay a fine or license renewal by credit card online, even though you could pay in person without the fee. These are convenience fees, not surcharges, and they're permitted everywhere.
The distinction matters because a business might try to call a surcharge a "convenience fee" to avoid state restrictions. If the fee is specifically tied to the payment method you chose — not to the service of paying online or by phone — it's a surcharge and subject to the rules above.
How to tell if a business is charging you illegally
Check whether the fee is disclosed before you complete the purchase. If you see the fee for the first time after you've entered your card information or at the final step of checkout, the business violated the disclosure rule. You can refuse the transaction and contact your card network to report it.
Check your state's law. If you live in California, Florida, New York, or Texas, any credit card surcharge is illegal, regardless of the card type or the business's claim. If a business in one of these states charges you a surcharge, you can dispute it with your card network or file a complaint with your state's attorney general.
Check the card type. If you used American Express or Discover, the business should not have charged a surcharge at all, unless your state allows it and the business has a specific agreement with the card network. Report an Amex or Discover surcharge directly to the card network through their merchant dispute process.
What to do if you're charged an illegal surcharge
Contact your credit card company and dispute the charge. Explain that the surcharge was either not disclosed before you completed the transaction, was charged on a card network that prohibits it, or was charged in a state where surcharges are banned. Most card networks will reverse the charge and investigate the merchant.
If the surcharge was disclosed but you believe it violates state law, file a complaint with your state's attorney general or consumer protection office. California, Florida, New York, and Texas have active enforcement against illegal surcharges, and your complaint can trigger an investigation.
Keep documentation: the receipt showing the surcharge, screenshots of the transaction, and any communication with the business about the fee. This evidence helps your card network or state agency investigate the merchant.
Frequently Asked Questions
Can a gas station charge me extra for using a credit card instead of a debit card?
Yes, if the surcharge is disclosed before you pump gas. The fee must be posted on the pump or at the entrance. Gas stations often charge different prices for credit versus cash or debit. However, if you live in California, Florida, New York, or Texas, the surcharge is illegal regardless of disclosure.
Is a 3 percent surcharge legal?
It depends on your state and card type. In most states, a surcharge on Visa or Mastercard cannot exceed the business's actual processing cost, which is typically 2 to 3 percent. A 3 percent surcharge is usually legal if it matches the business's cost. Amex and Discover surcharges are more restricted. In California, Florida, New York, and Texas, no surcharge is legal.
Can a restaurant charge a surcharge for credit card payments?
Yes, in most states, if the surcharge is disclosed before you order. The restaurant must post it on the menu, on a sign, or tell you verbally. However, the surcharge cannot exceed the restaurant's actual processing cost. In California, Florida, New York, and Texas, restaurants cannot charge a surcharge at all.
What if a business says the surcharge is a "service charge" instead?
The name doesn't matter — what matters is whether the fee is tied to your payment method or to a service. If the fee is added because you used a credit card, it's a surcharge and subject to the rules above. If it's a mandatory tip or service charge unrelated to payment method, different rules apply. Check your receipt to see what the charge is actually for.
Can I dispute a surcharge I agreed to?
You can dispute it if the surcharge was not clearly disclosed before you completed the transaction. If you saw the surcharge posted and chose to proceed anyway, disputing it is harder. However, if you live in a state that bans surcharges, you can dispute any surcharge regardless of whether you saw it, because the charge itself is illegal.