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Your Complete Guide to Credit Card Surcharges

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Melissa Johnson

Melissa Johnson

Melissa Johnson has been writing about payment processing and mobile payments since 2014, and has been quoted in articles for Credit Karma and The Next Web, among others. She graduated from The University of Kansas in 2010 with bachelor's degrees in English and journalism.
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    Hello Lisa,

    Do you have a list of companies that provide zero fee credit card processing (surcharging) services, similar to CardX?


      Jessica Dinsmore

      Hi Francis,

      We do have an article on this topic, though no list at this time. Best of luck!

        Shelley Charlton

        Hi Melissa,

        I a an ISO direct with FD. You should know that in performing the compliance process which can take months. They will not allow you to take any Debit Cards (Pin or Otherwise) and they say you must turn off Amex because fo the playing field not being level. I am not sure how other processors handle the compliance process piece. But the whole process has become so discouraging most of my merchants attempting to doit just give up. This is all due to the fact that they are giving up the possibility of more revenue that outweighs the discount.


          1. Can I charge a 4% surcharge regardless if it is a swipe or keyed credit card transaction?
          2. How do I determine if they are using a credit card or debit card?


            Jessica Dinsmore

            Hi Brian,

            Thanks for your questions! To answer your first question, Visa allows surcharging at the brand level (all visa products) or at a product level (a surcharge for, say, business rewards cards). The actual surcharge amount needs to be posted at the point of sale. So transaction type (swiped or keyed) would not factor in here.

            Second, as for debit or credit cards, this is exactly what Visa rules say:
            “Merchants with Acceptance Devices that offer Cardholder choice for debit Transactions in the form of “credit” and “debit” buttons must ensure that:
            – Visa debit Card Transactions are not assessed a US Credit Card Surcharge
            – It is made clear to the Cardholder that surcharges are not permitted on debit Transactions regardless whether a Cardholder selects the “credit” or “debit” button”

            So from that, it’s clear that if the card says “debit” on it, you can’t charge a credit card surcharge even if the customer processes it at a credit card rather than entering a PIN. The Surcharge rules start on page 378. I hope that helps!


              I work for Broker of credit cards. If we have information on an ISO signing up businesses with no 30 day notice to card brands and charge 4% on all cards including debit cards, how do we submit the information to Visa/MC?

                Jessica Dinsmore

                Hi Linda,

                Our understanding is that you can report it via the Visa and Mastercard websites, or you can even call Visa directly or send a written report. Alternatively you might be able to report them to consumer financial protection bureau.


                  Several of our vendors in Florida and Texas who accept credit cards charge us a percentage of the total as a surcharge if we pay by card instead of a check or other method. Are they allowed to do this? I haven’t been able to figure out of the ban in these states is valid or not, so have been hesitant to call the vendors our on this.


                    Jessica Dinsmore

                    Hi Michielle!

                    According to Visa:

                    “Q. Is a merchant allowed to add a surcharge to the purchase amount for using a Visa card?

                    A. In general, no. Surcharging is currently permitted in Australia, Mexico, and New Zealand, and on certain credit card transactions in the U.S.

                    Surcharging isn’t allowed everywhere in the U.S. Currently, there are laws limiting surcharging in Colorado, Connecticut, Kansas, Maine, Massachusetts, New York, Oklahoma, and Texas. California’s and New York’s laws limiting surcharging have been enjoined from enforcement pursuant to court orders, but appeals are pending. An order upholding Florida’s law limiting surcharging was reversed on appeal, but remains subject to further litigation. Consumers who are subjected to a surcharge in states where they may be prohibited from surcharging may want to report the retailer to their state attorney general’s office.”

                    I hope that answers your question. Best!

                      Adam Weddle

                      With the regulation that surcharges cannot exceed 4%, how are local government agencies getting away with charging flat fee ‘surcharges’, eg. $10 for all police citations? In come cases that may be less than 4%, but significantly more in others. Aren’t they held to the same standards?

                        Jessica Dinsmore

                        Hi Adam,

                        They’re likely passing them off as convenience fees, which have different regulations. You can read about this here.

                          Steve Washburn

                          We have a local restaurant that is charging a flat 69 cent surcharge on credit cards and debit cards. This fee is charged irregardless of the total amount charged. This can equate to a 8-10% fee on a small meal. Is this allowed or legal?

                            Jessica Dinsmore

                            Hi Steve,

                            Without knowing where you are located, it is really hard to say. Generally, surcharges are supposed to be capped at 4%, however, if they’re passing it as a convenience fee, it might technically be acceptable, but I believe they should be capped at the processing amount.


                              Has anything come of the New York case? Are all states allowed to now process surcharges? We recently started a surcharge program at our restaurant. It has been testing… Not all people are generally excepting whether they are told before purchase or not.

                                Jessica Dinsmore

                                Hi Justin,

                                There is a recent post in the Lexology library titled: NY’s Highest Court Will Consider Credit Card Surcharge Ban. That may have the info you are looking for. Hope that helps!



                                  Great article, thank you. I have a real life example for you. I live in Kansas in an apartment complex. Until very recently, the management were charging fees to pay rent using credit card. They now have stopped us from paying by credit card claiming that a “new” law was passed in Kansas prohibiting them from charging fees for credit card use. I looked into this and it appears this law is not “new” at all, it has been here for many years. Does this mean my apartment community has been breaking the law for a long time and have potentially stolen thousands of dollars from renters like me? If yes, what do they risk and what can we do to rectify the wrong that was done?

                                  Thank you,


                                    Melissa Johnson

                                    Hi, Stephan!

                                    There’s a lot of details I’m missing, so unfortunately I can’t give you a solid answer. It certainly sounds like your apartment complex might have gotten called out for some dodgy behavior. However, keep in mind it may not actually be your apartment complex doing the payment processing. They might have a white-label setup powered by someone who handles the transactions anonymously. And they might have switched processors, or gotten new (smarter) management, which could contribute to the change in policy. I certainly think it’s possible that your complex management could and would lie about the reasoning to mitigate any sort of negative fallout with residents.

                                    The problem is that while surcharges are banned, convenience fees aren’t. As a fellow Kansas resident, I have paid a LOT of convenience fees for online payments (especially for utility bills). My apartment complex charges a convenience fee for credit transactions and uses a separate processor to accept e-checks.

                                    I can’t find specifics on what to do in Kansas if you suspect that you’re paying an illegal surcharge but I do know that generally speaking if a company gets caught violating card association rules or local laws, they could potentially have their merchant account terminated, making them unable to accept cards unless they can find another processor willing to take them on. (Effectively, that means you’d have to drop a check off in person every month instead of paying online.) If you’re genuinely really concerned, talk to a local consumer advocacy group or the state’s attorney general, and see if there’s anything that can be done. But otherwise, as a fellow consumer, I advise always paying with ACH/bank accounts where you can!


                                      I work at a preschool. We are supposed to begin adding a surcharge to credit card users at the school. We will be using a credit card processing company called CardX. Are they responsible for notifying the credit card company of our intention? Has anyone used them? This seems to be more complicated than they made it sound over the phone.

                                        Jessica Dinsmore

                                        Hi Terry,
                                        Unfortunately, we have not reviewed CardX Processing, so we can’t confidently give an assessment one way or the other, that being said, I suggest contacting them directly. Best of luck to you!


                                          My company accepts all credit cards (VISA, MasterCard, Discovery and, American Express). We use PayPal as our credit card processor. We would like to add a handling fee to help offset some of the expense of the PayPal fees. We are located in South Carolina, Mississippi, Pennsylvania, and Oklahoma and sell in various other states. Would this be appropriate?

                                            Jessica Dinsmore

                                            Hi Phil,
                                            Per their user agreement, it appears that it would not be appropriate.

                                              Chad Smith

                                              Hey Phil,
                                              I work with a company that has a program that allows you to share or pass on all of the card fees to your customers. Card Payment Solutions is based in Florence, SC and we would be more than happy to explain how this can benefit your company. You can contact someone through the website, or you can also contact me at or by phone at (864)293-9733. I’m not sure what part of SC you have locations, but I am based out of Greenville and would be happy to meet with someone if they are in the upstate. Hope this helps!

                                                Patty Hall

                                                I wondered it a surcharge can be levied for certain types of transactions but not others. In other words, if you charge a surcharge for one thing to you have to charge it for everything?

                                                  Melissa Johnson

                                                  Hi, Patty!

                                                  You can’t pick and choose which products or types of transactions to add a surcharge for, unfortunately. What you can choose is whether to surcharge at the brand level (all Visa transactions, which means all MasterCard and all Discover cards, and therefore all American Express cards), or at a card level — only particular kinds of cards (namely those with higher fees). However, surcharging at the card level seems a bit complicated to me because all of the networks’ surcharging rules are linked. Visa and MasterCard’s are identical, for example. American Express basically says you can’t add a surcharge ONLY for Amex cards (Which would discourage customers from using those cards).

                                                  I recommend checking out Visa’s Q&A on surcharging. It’s helpful, though it’s by no means comprehensive.



                                                    “If your business operates in multiple states, you can still add a surcharge in states that allow the practice — just not in the ones with bans.”

                                                    Is there case law or some other authority to support the above?



                                                      Melissa Johnson

                                                      Hi, Mira!

                                                      The best source is actually the card networks, since they set the guidelines.

                                                      From Visa’s Surgcharging Q&A for Merchants:

                                                      “Q. I operate stores in multiple states. I understand that state laws prohibit me from
                                                      surcharging in some states where I operate, but not others – does that mean I can’t
                                                      surcharge in any of the states where I operate?

                                                      No. If a merchant is prohibited from surcharging in one state, Visa’s rules do not prevent the
                                                      merchant from surcharging in other states that allow the practice. ”


                                                      Hope this helps!

                                                        Samuel Smith


                                                        I wouldn’t think that surcharging a donation is a good idea. The benefactor is already giving probably at the level they are comfortable with. I would think that surcharging would hurt donations more than the offset of fees.
                                                        I personally know people that will leave a smaller tip when they are surcharged because they feel like the surcharge is already on top of the price, just like a tip.

                                                          Phil T

                                                          I have a Visa debit card. The merchant charges a surcharge on my card saying they record it as a credit not a debit. They say they don’t accept debit payments. Is this legal?

                                                            Jessica Dinsmore

                                                            Unfortunately, we don’t know the answer to this question. If you happen to figure it out, please let us know as it will help our other readers.


                                                              HI Phil,

                                                              This is not legal for the merchant to do on the surcharge program. It would put them in violation of the surcharge rules. The person who is really at fault is the credit card processing company. In order for the debit to be recorded as debit and not credit, the processing company would have to enable that function on the terminal.
                                                              Feel free to reach out to me with any questions.



                                                                What are your findings on Non-Profit organizations charging a Surcharge for donations?


                                                                  Jessica Dinsmore

                                                                  Tovi, we’ve never heard of such a thing, but if you can find us some examples, we’d love to see them.


                                                                    Does the Colorado ban impact both the buyer and the seller? If my business is HQ in a state permitted to surcharge, can I put a surcharge on an e-commerce sale being shipped to a customer in Colorado?

                                                                      Melissa Johnson

                                                                      Hi, Lisa!

                                                                      Surcharging is allowed on CNP (eCommerce transactions), provided you follow all of the other requirements. However, commerce in general is governed by individual states, so the laws and requirements vary. I can’t find any specifics about surcharging across borders as you’ve indicated. I recommend talking with an accountant or lawyer to make sure you are absolutely clear on what you can and cannot do.

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