Is It Legal to Charge Credit Card Fees? What Businesses Need to Know in 2025
As credit card usage grows, so do the fees merchants must pay to process transactions. To offset these costs, some businesses consider adding a surcharge when customers pay with a credit card. But is this practice actually legal?
Let’s break down what’s allowed, what’s not, and how you can stay on the right side of the law.
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What Are Credit Card Surcharges?
A credit card surcharge is an extra fee added to a sale when the customer chooses to pay with a credit card instead of cash, check, or debit. These fees are typically used to help cover the processing costs imposed by credit card companies.
Is It Legal to Charge Customers Credit Card Fees?
Yes, but it depends on your location. In the U.S., surcharging is allowed in most states—but there are rules you must follow.
States Where Surcharging Is Restricted or Prohibited (as of 2025):
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Still restricted: Connecticut, Massachusetts (laws are under review—check for updates)
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Previously restricted but now allowed with conditions: New York, California, Florida
⚠️ Important: Always check the latest local and federal regulations or consult a legal expert before implementing surcharges.
Rules for Legally Charging Credit Card Fees
If you decide to apply a credit card surcharge, you must:
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Disclose it clearly at the point of sale (both in-store and online).
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Limit the fee to what you actually pay in processing costs (typically no more than 3%–4%).
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Notify credit card companies in advance (e.g., Visa and Mastercard usually require 30 days’ notice).
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Avoid surcharging debit or prepaid card transactions.
Alternatives to Surcharging
Not all businesses want to risk customer dissatisfaction by adding fees. Here are some other options:
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Offer a cash discount: Instead of charging extra for credit cards, offer a small discount for cash payments.
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Adjust product pricing slightly: Include card processing fees in your general pricing.
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Negotiate better rates: Some payment processors offer lower fees depending on your sales volume or industry.
Final Thoughts
Credit card surcharges can help cover transaction fees, but they must be used responsibly and legally. Always prioritize transparency and compliance, and consider customer experience before deciding on your approach.
✅ Tip: If you’re unsure whether to implement surcharges, consult with your payment processor or legal advisor.
Ingrid Maldine is a business writer, editor and management consultant with extensive experience writing and consulting for both start-ups and long established companies. She has ten years management and leadership experience gained at BSkyB in London and Viva Travel Guides in Quito, Ecuador, giving her a depth of insight into innovation in international business. With an MBA from the University of Hull and many years of experience running her own business consultancy, Ingrid’s background allows her to connect with a diverse range of clients, including cutting edge technology and web-based start-ups but also multinationals in need of assistance. Ingrid has played a defining role in shaping organizational strategy for a wide range of different organizations, including for-profit, NGOs and charities. Ingrid has also served on the Board of Directors for the South American Explorers Club in Quito, Ecuador.
