When Businesses Can and Cannot Charge You a Credit Card Fee
Charging a credit card fee is legal in most situations, but the rules depend on where you live and what type of business you are
A business can charge you a fee for paying with a credit card in most U.S. states and many other countries. However, the rules are not the same everywhere. Some states cap how much a business can charge, some ban the practice entirely for certain types of transactions, and some require the business to tell you about the fee before you pay. The key is understanding what your state allows and what the card networks themselves permit.
The short answer: it is usually legal, but there are real limits. A gas station in California faces different rules than one in Texas. A doctor's office may face restrictions that a restaurant does not. And some businesses — like those accepting American Express — operate under stricter rules than those accepting Visa or Mastercard.
Key Takeaways
- Most states allow businesses to charge a credit card fee, but some states ban it entirely or cap the amount at a specific percentage.
- Visa and Mastercard prohibit surcharges in most situations, while American Express and Discover allow them more broadly.
- A business must disclose the fee before you complete the transaction, not after you have already committed to the purchase.
- Some professions — like medical practices and law firms — face stricter rules or outright bans on credit card fees in certain states.
- Debit card fees are treated differently than credit card fees and face tighter restrictions in most places.
State laws that ban or limit credit card fees
Ten states prohibit businesses from charging a credit card surcharge at all: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. If you live in one of these states, a business cannot legally add a fee to your credit card purchase, even if they want to. This applies to in-person transactions, online purchases, and phone orders.
Several other states allow a fee but cap it at a specific percentage. Illinois caps surcharges at 2 percent. Vermont allows a fee but only if the business also offers a discount for paying cash. Some states distinguish between online and in-person sales, or between different types of cards. The rules are specific enough that a business operating in multiple states often has to follow the strictest rule that applies to any of them.
A few states have no statewide rule but allow individual cities or counties to set their own limits. This means the fee rules can change depending on which neighborhood you are shopping in. If you are unsure whether a fee is legal where you live, your state's attorney general office or consumer protection division can tell you the current rule.
What Visa, Mastercard, and American Express actually allow
The card networks themselves set rules that can be stricter than state law. Visa and Mastercard have historically prohibited surcharges in most situations, though they have loosened this in recent years. As of 2024, Visa and Mastercard allow a surcharge in states where state law permits it, but the surcharge cannot exceed the actual cost the merchant pays to process the card. That cost is typically 1 to 3 percent of the transaction.
American Express and Discover have fewer restrictions. They allow merchants to charge a surcharge in most situations, though they still prohibit it in states where state law bans it. The surcharge still cannot be misleading — it has to be clearly labeled as a credit card fee, not hidden in the total price.
These network rules matter because a business that violates them can lose the ability to accept that card entirely. A restaurant that charges an illegal Visa surcharge risks having Visa revoke its merchant account. This is why many businesses simply do not charge the fee, even in states where it would be legal — the risk of losing card acceptance is not worth the small amount they would collect.
How the fee must be disclosed to you
If a business is allowed to charge a credit card fee, they must tell you about it before you commit to the purchase. This means the fee has to be visible at the point of sale — on the menu, on the website, on the price tag, or on the checkout screen — not revealed after you have already handed over your card or clicked "buy now."
The disclosure has to be clear and separate from the base price. A business cannot hide the fee in the total or call it something else to make it sound smaller. They also cannot charge different fees for different credit cards without telling you which card costs which amount. If you are paying in person, the fee should be shown before you swipe or insert your card. If you are paying online, it should appear before you click the final "confirm purchase" button.
If a business charges you a fee that was not disclosed beforehand, you have grounds to dispute it. You can contact your credit card company and report the unauthorized charge, or file a complaint with your state's attorney general or consumer protection office.
Debit card fees and PIN-based transactions
Debit card fees are treated differently than credit card fees and face tighter rules. The Dodd-Frank Act, a federal law passed in 2010, limits what businesses can charge for debit card transactions. A business can charge a debit card fee only if the fee does not exceed the actual cost of processing the debit card — typically much less than a credit card fee.
If you enter your PIN (making it a PIN debit transaction), the rules are even stricter. Many states and the card networks themselves prohibit surcharges on PIN debit transactions altogether. This is one reason you might see a sign that says "no surcharge on debit" — the business is following the rules for PIN transactions specifically.
If you swipe a debit card without entering a PIN (signature debit), the rules are closer to credit card rules, though still more restrictive. The fee still cannot exceed the actual processing cost, which is usually lower than a credit card fee.
Industries with special restrictions
Some professions face stricter rules than others. Medical practices, law firms, and other licensed professionals are often prohibited from charging credit card fees in certain states, even where other businesses can. This is because regulators view these fees as potentially coercive — a patient might feel pressured to pay with cash to avoid the fee, which could discourage them from seeking care they need.
Government agencies and utilities also face restrictions. Many states prohibit or limit credit card fees for utility payments, property taxes, vehicle registration, and other government services. The reasoning is similar: these are not optional purchases, and a fee could unfairly burden people who cannot pay by other methods.
Nonprofits and educational institutions have varying rules depending on the state. Some states allow them to charge fees; others do not. If you are unsure whether a specific organization can legally charge you a credit card fee, contact your state's attorney general office with the organization's name and type.
What to do if you are charged an illegal fee
If a business charges you a credit card fee that violates your state's law or the card network's rules, you have several options. First, ask the business to remove the fee. Many times, the business owner may not realize the fee is illegal in your state, and a polite conversation can resolve it.
If the business refuses, contact your credit card company. Most card companies allow you to dispute charges that were not authorized or that violate their terms. Explain that the fee was either not disclosed beforehand or violates your state's law. The card company will investigate and may reverse the charge.
You can also file a complaint with your state's attorney general office or consumer protection division. These agencies track complaints and can take action against businesses that repeatedly violate the law. A single complaint may not result in immediate action, but patterns of complaints can trigger an investigation.
Frequently Asked Questions
Can a business charge a credit card fee if they do not accept cash?
No. If a business does not accept cash, they cannot charge a credit card fee in most states, because the fee would be mandatory rather than optional. The fee is only legal if you have a genuine alternative payment method. Some states explicitly ban this practice; others treat it as an unfair business practice under general consumer protection laws.
Is a "convenience fee" different from a "credit card fee"?
Not legally. A convenience fee is just another name for a credit card surcharge. Some businesses use the term to make the fee sound more justified, but the rules are the same. The fee must be disclosed beforehand, must not exceed the actual processing cost, and must comply with your state's law and the card network's rules.
Can a business charge different fees for different credit cards?
Yes, if they disclose the difference beforehand. A business can charge 2 percent for American Express and 1.5 percent for Visa, for example, because American Express typically costs more to process. However, the fee must be clearly labeled at the point of sale so you know what you are paying before you hand over your card.
What if I paid with a credit card and was not told about the fee until after the transaction?
Contact your credit card company and dispute the charge as unauthorized or in violation of the card network's rules. You can also file a complaint with your state's attorney general. A fee that was not disclosed beforehand is not enforceable in most states.
Do online businesses follow the same rules as in-person businesses?
Yes. Online businesses must follow the same state laws and card network rules as brick-and-mortar stores. The fee must be disclosed before you complete the purchase, which means it should appear on the checkout page before you click "confirm order." If it does not, you may be able to dispute it with your card company.