Those pesky credit card fees. What exactly is a surcharge, what is legal to charge, and can you be charged when using a debit or prepaid card? We found some answers for you.

Photo by Blake Wisz on Unsplash
Photo by Blake Wisz on Unsplash

Has this happened to you? You run in to the convenience store to grab a water and a pack of gum. You get ready to pay and find out that you'll be charged an extra fee for the transaction. Your order didn't meet the minimum requirement so now you'll be charged an extra 3%. It may be frustrating, but is it legal? Barb is on the case!

What is a credit card surcharge? According to Merchant Maverick, "Surcharging is the practice of adding on a small fee to a credit card transaction to cover the merchant’s costs for processing the payment. Instead of the merchant having to absorb this expense, the customer who chooses to pay by credit card pays for the processing costs that do not apply to other payment methods."

I wanted to know if a fee can be charged if using a debit card? "You cannot impose a prepaid card or debit card surcharge; you can only do so on credit cards.

How much should I expect to be charged? "A business can’t profit from surcharges; they can only recoup their baseline costs. So, credit card surcharges cannot exceed the actual cost to process a transaction and are capped at a maximum of 4%." I also found that it will depend on which card is being used.

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According to, "Merchants are required to create signage at the point of entry and point of sale, alerting customers about credit card surcharges, and they must itemize the surcharge on transactions. Finally, the surcharge must not exceed the merchant’s cost of accepting the credit card.

But, back to the original question. Is it legal to charge these fees in all states?

Credit card surcharges are legal in most states, but in Colorado, Connecticut, Kansas, Massachusetts and Puerto Rico it’s illegal for businesses to impose a credit card surcharge.

Finally, always be sure to check your receipt to be sure the credit card surcharge is what you expected to pay. If it is not, ask to talk to the manager for explanation.

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