What are my rights regarding credit card surcharges?

Small businesses are allowed to add a credit card surcharge – under specific rules

Your Business Credit with Elaine Pofeldt

Elaine Pofeldt is a journalist whose articles on entrepreneurship and careers have appeared in Fortune, Working Mother, Money and many other publications. She is a former senior editor at Fortune Small Business magazine and an entrepreneur herself, as co-founder of 200kfreelancer.com. Her book, “The Million-Dollar, One-Person Business,” was released in 2018. She writes "Your Business Credit," a weekly column about small business and credit, for CreditCards.com.

Ask Elaine a question, or see if your question has already been answered in the Your Business Credit answer archive.

Are businesses allowed to add a minimum-spend surcharge on credit cards?

Businesses are allowed to impose credit card surcharges made on credit cards within certain rules.

They must have a sign at the register warning customers about the surcharges, and these cannot exceed 4 percent of the purchase.

These rules, at the same time, don't apply to debit cards.

Expert Q&A

Check out all the answers from our credit card experts.

Dear Your Business Credit,

Today, I went to a deli for lunch and the bill came out to $11. The counter person said he had to charge me an extra dollar for using a Visa card because they have a $12 minimum on cards. I told him that was against his contract with Visa and refused to pay. Are businesses allowed to do that? – Gerard

Dear Gerard,

This is a complicated situation. The deli may have been allowed to impose a surcharge on credit card purchases – but it is not entitled to charge customers more for not meeting a minimum spend.

See related: Can my business add a surcharge for card-paying customers?Merchants can usually add credit card fees

Credit card surcharges are legal

Businesses are allowed to impose a surcharge on credit card purchases made on Visa and Mastercard, under a court settlement that took effect in January 2013.

At present, merchants can pass along a charge equal to what they pay to accept the card, up to 4 percent. For a more detailed discussion, see our story on merchants adding surcharges.

Card surcharge limitations

But the 9 percent surcharge the deli imposed on your lunch would exceed the 4 percent that is allowed. The deli also does not seem to have a sign at the register warning about the surcharge, which is required under the court settlement.

Some states instituted bans on credit card surcharges, but those bans have been undercut by the U.S. Supreme Court's ruling against New York state's no-surcharge law in 2017. Although other states were not directly involved in the case, any laws that mirrored New York's law are now unenforceable under the high court's decision.

The deli is also wrong to impose a minimum credit card purchase of $12. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the minimum for credit card purchases cannot be greater than $10. The law also gives the Federal Reserve the right to increase the minimum.

Because the deli set a limit above $10 and failed to follow the rules for imposing a surcharge, you could call the phone number on your Visa card to report the business. Imposing the higher limit and excessive surcharge would violate the merchant’s agreement with Visa and could potentially jeopardize the deli’s ability to accept the card.

However, if the deli makes a great pastrami on rye, and you want the owner to be able to continue accepting Visa cards, you might want to give the owner another chance and instead show up next time with Visa’s guidelines for merchants.


Tip: Some businesses may charge convenience fees for using a credit card as a payment form. These are different from surcharges. Convenience fees are charges levied for the privilege of paying for a product or service using an alternative payment, or a payment method that is not standard for the merchant. Read "Convenience fees: When is it OK to charge extra to use a credit card?" to learn more.

Different rules apply to debit cards

The situation would have been different if you wanted to pay with a debit card, by the way.

“There is no law regarding debit card transaction minimums, and whether or not a merchant can have a debit card transaction minimum depends on the contractual agreement between the card network (Visa, Mastercard, etc.) and the merchant,” said Charlton M. Messer, founder of Messer Law Firm PLLC in Dallas, in an email. “For example, Visa does not allow any minimum transaction amount for debit card purchases.” Nonetheless, surcharges are not allowed for debit card purchases.

As you can see, the laws and rules governing credit card transactions are very complicated.

For that reason, I highly recommend that every small-business owner look up the merchant guidelines for every card they accept at least several times a year, to make sure they are not violating any rules. It’s all too easy to make mistakes – and alienate customers like you.

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Updated: 12-18-2018