Credit Card Surcharge Laws by State
The legality of surcharge fees varies by state. Some states prohibit surcharges altogether, while others allow them but regulate how much merchants can charge. It can be confusing to keep track of the different surcharge laws in each state, so we've put together a guide to help you navigate the credit card surcharge laws by state.
States that Prohibit Surcharges
There are currently ten states that prohibit surcharge fees:
California
California prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
Colorado
Colorado prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
Connecticut
Connecticut prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
Florida
Florida prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
Kansas
Kansas prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
Maine
Maine prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
Massachusetts
Massachusetts prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
New York
New York prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
Oklahoma
Oklahoma prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
Texas
Texas prohibits merchants from charging surcharges on credit card transactions. However, merchants are allowed to offer discounts for paying with cash or a debit card.
States that Allow Surcharges with Restrictions
There are currently five states that allow surcharge fees but regulate how much merchants can charge:
Colorado
While Colorado prohibits merchants from charging surcharges on credit card transactions, they are allowed to charge processing fees that are equal to the amount that the merchant is charged to accept the credit card payment.
Georgia
Georgia allows merchants to charge surcharges on credit card transactions, but the surcharge cannot exceed 3% of the purchase price.
Kansas
Kansas prohibits merchants from charging surcharges on credit card transactions, but they are allowed to charge processing fees that are equal to the amount that the merchant is charged to accept the credit card payment.
Massachusetts
While Massachusetts prohibits merchants from charging surcharges on credit card transactions, they are allowed to charge processing fees that are equal to the amount that the merchant is charged to accept the credit card payment.
Utah
Utah allows merchants to charge surcharges on credit card transactions, but the surcharge cannot exceed the actual cost of processing the credit card payment.
States that Allow Surcharges
There are currently 35 states that allow surcharge fees:
Alabama
Alaska
Arizona
Arkansas
California
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kentucky
Louisiana
Maine
Maryland
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
Rhode Island
Tennessee
Texas
Utah
Virginia
Washington
West Virginia
Wisconsin
Wyoming
FAQ
Q: What is a surcharge fee?
A: A surcharge fee is an additional charge that merchants add to your purchase when you use a credit card instead of paying in cash or with a debit card.
Q: Why do merchants charge surcharge fees?
A: The purpose of the surcharge fee is to offset the costs that merchants incur when they process credit card payments.
Q: Is it legal for merchants to charge surcharge fees?
A: The legality of surcharge fees varies by state. Some states prohibit surcharges altogether, while others allow them but regulate how much merchants can charge.
Q: Can merchants offer discounts for paying with cash or a debit card?
A: Yes, merchants are allowed to offer discounts for paying with cash or a debit card in most states.
Conclusion
It's important to be aware of the credit card surcharge laws in your state when you're making purchases with your credit card. While some states prohibit surcharge fees altogether, others allow them but regulate how much merchants can charge. If you're unsure about the surcharge laws in your state, be sure to check with your state's attorney general's office or department of consumer affairs.