What retailers can and cannot charge you for credit card use
Retailers can charge you a fee for using a credit card in most U.S. states, but only under specific conditions. The rule depends on which card network you use — Visa, Mastercard, American Express, or Discover — and what state you live in. Most retailers do not charge these fees because the cost of processing is already built into their business model, but some industries (gas stations, restaurants, online sellers) have started adding them as card costs have risen.
The key difference is between a surcharge and a discount. A surcharge is an extra fee added to your bill because you chose to pay with a card. A discount is a reduction in price if you pay with cash or debit instead. Federal law and card network rules treat these very differently, and so do state laws.
Key Takeaways
- Visa and Mastercard allow retailers to charge a surcharge, but only if they disclose it clearly before you complete the purchase and it does not exceed the retailer's actual cost to process the card.
- American Express and Discover have stricter rules that generally prohibit surcharges, though some states have carved out exceptions for specific industries.
- Ten states (California, Colorado, Connecticut, Florida, Kansas, Maine, New York, Oklahoma, Texas, and Vermont) ban credit card surcharges outright, even if the card network allows them.
- A retailer can always offer a discount for paying with cash or debit, and this is legal everywhere — the difference is that a discount lowers the card price, while a surcharge raises it.
- Gas stations have a federal exemption that lets them charge more at the pump than inside the store, but this is a price difference, not a surcharge, and the rules are complex.
Visa and Mastercard surcharge rules
Visa and Mastercard both permit retailers to add a surcharge when you use their cards. The surcharge must be disclosed before you complete the transaction — meaning you have to see it on the menu board, the website, or the register screen before you commit to paying. You cannot be surprised by it after you have already agreed to the purchase.
The surcharge also cannot exceed what the retailer actually pays to process the card. For most retailers, that cost is between 2 and 3 percent of the transaction, though it varies by business type and the specific agreement with their payment processor. If a retailer charges 5 percent as a surcharge, they are likely violating the card network rules, and you could report it to Visa or Mastercard.
In practice, Visa and Mastercard do not actively police these rules — they rely on complaints from cardholders. If you see a surcharge that seems excessive or was not disclosed, you can contact the card network directly through your card issuer.
American Express and Discover restrictions
American Express and Discover have historically prohibited retailers from charging any surcharge at all. This is a stricter rule than Visa and Mastercard, and it reflects these networks' different business model and market position. If you see a surcharge at a retailer and you are paying with an American Express or Discover card, the retailer is likely violating the card network's rules.
However, some states have passed laws that override the card networks' own rules. For example, New York State allows surcharges on all cards, including American Express and Discover, as long as they are disclosed and do not exceed the retailer's processing cost. This creates a patchwork where the same retailer might be allowed to charge a surcharge in one state but not another.
State laws that ban surcharges entirely
Ten states have passed laws that prohibit credit card surcharges no matter what the card network allows. These states are California, Colorado, Connecticut, Florida, Kansas, Maine, New York, Oklahoma, Texas, and Vermont. In these states, a retailer cannot add an extra fee to your bill because you chose to pay with a credit card, period.
If you live in one of these states and a retailer charges you a surcharge, you can report it to your state's attorney general or consumer protection office. You may also be able to dispute the charge with your card issuer, though the outcome depends on your card's terms and your state's specific law.
These state laws do not prevent retailers from offering a cash discount. A retailer in California can still say "cash price $10, card price $10.50" — the difference is that the card price is the regular price and the cash price is lower. This is legal everywhere because it is a discount, not a surcharge.
The difference between a surcharge and a discount
This distinction matters because it determines whether a fee is legal. A surcharge is an extra charge added because you chose to pay with a card — the base price stays the same, and the card price goes up. A discount is a reduction in price for paying a different way — the card price is the regular price, and the cash price is lower.
Legally and practically, they are the same thing: you pay more for using a card. But the framing changes which rules apply. Surcharges are restricted by card networks and state laws. Discounts are allowed everywhere, because they are not technically a fee — they are just a lower price for a different payment method.
A retailer cannot disguise a surcharge as a discount by calling it one. If the card price is clearly the standard price and the cash price is clearly a reduction, it is a discount. If the cash price is the standard price and the card price is higher, it is a surcharge, no matter what the retailer calls it.
Gas station pricing and the federal pump rule
Gas stations have a special exemption under federal law that lets them post different prices at the pump than inside the store. This is not technically a surcharge — it is a price difference — but the effect is the same: you pay more when you use a credit card at the pump.
The rule comes from the Petroleum Marketers Association Settlement, a 1992 agreement between gas stations and Visa and Mastercard. It allows stations to charge more for credit card purchases at the pump specifically, not inside the store. The price difference must be disclosed on a sign at the pump, and it cannot exceed the retailer's actual processing cost.
This exemption applies only to gas stations and only at the pump. A gas station cannot charge a surcharge inside the store or for other products, and the rule does not apply to convenience stores or other retailers, even if they sell gas.
How to report an illegal surcharge
If you believe a retailer has charged you an illegal surcharge, you have several options. First, contact your card issuer directly — most cards allow you to dispute charges, and an illegal surcharge may may have access to. Your issuer can investigate and may reverse the charge.
Second, report the retailer to the card network. You can do this through your card issuer's website or customer service line. Visa, Mastercard, American Express, and Discover all have complaint processes, though they do not always result in immediate action.
Third, if you live in a state that bans surcharges, report the retailer to your state's attorney general or consumer protection office. Many states have online complaint forms, and some actively investigate retailers who violate surcharge laws.
Frequently Asked Questions
Can a restaurant charge me extra for paying with a credit card?
It depends on your state and which card you use. In the ten states that ban surcharges, no. In other states, a restaurant can charge a surcharge on Visa and Mastercard if it is disclosed before you order and does not exceed their processing cost. American Express and Discover rules are stricter, though state laws may override them. Always check the menu or ask before ordering.
Is a 3 percent credit card fee legal?
It depends on the state and card network. In states that allow surcharges, 3 percent is usually within the range of actual processing costs and may be legal. In states that ban surcharges, it is not legal at all. If you see a 3 percent fee, check your state's law and the card network rules for your specific card.
Can a retailer refuse to take my credit card?
Yes. Retailers can choose which payment methods to accept. They can require a minimum purchase to use a card, refuse certain card types, or accept only cash. They just cannot charge you a surcharge for using a card they do accept — unless your state and card network allow it.
What if a retailer charges a surcharge but did not tell me until after I paid?
Contact your card issuer and dispute the charge. Undisclosed surcharges violate both card network rules and most state laws. Your issuer can investigate, and you may be able to get the surcharge reversed. You can also report the retailer to your state's attorney general if you live in a state that bans surcharges.
Can online retailers charge a credit card fee?
Yes, under the same rules as brick-and-mortar retailers. They must disclose the surcharge before you complete the purchase — usually on the checkout page before you confirm your order. If they do not disclose it until after you have paid, you can dispute it with your card issuer.