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What are credit card convenience fees?

Credit card convenience fees can be worth paying in the right circumstances


Paying with a credit card can help you earn rewards, but there are situations in which a convenience fee can apply. Find out when these fees are worth it, and when you should seek out another way to pay.

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There are several reasons for paying with plastic, such as the convenience factor and the potential for rewards. However, credit card convenience fees can apply to certain types of purchases, and they can chip away at your rewards or even wipe them out altogether.

Before you pay a credit card convenience fee, assess whether the added charge is worth it, and if paying with cash or debit might leave you better off. Read on to find out what credit card convenience fees are, how much they typically amount to and how to decide if they’re worth it.

What is a convenience fee?

Convenience fees are charges levied for the privilege of paying for a product or service using an alternative payment method, such as a credit card. Average convenience fees are anywhere between 1 percent and 3.5 percent, but they can also come in the form of flat fees.

You will typically get charged a convenience fee, for example, for paying utility bills, such as your electric or gas bill. In many cases, you can pay with a credit card online, but you’ll be charged a flat fee of $1 to $3.50 for each payment.

On the flipside, you can choose to pay utility bills without a fee if you choose a linked bank account or use your debit card instead.

Convenience fees vs. surcharge fees

While credit card convenience fees are added on for completing a transaction remotely — like online, via mobile app or over the phone — surcharges are fees that merchants impose for using a credit card rather than cash during an in-person transaction.

Most issuers frown upon the use of surcharges, and Visa even requires merchants to notify it at least 30 days before a merchant intends to surcharge credit card sales. Furthermore, Visa requires merchants to post signage at the point of sale that discloses the surcharge policy.

Some states also have laws that ban or limit the use of credit card surcharges. However, merchants are allowed to offer discounts for customers who pay in cash rather than by card. For example, a business may apply a flat 10 cent discount when someone pays with cash, but offer no discount for card-based payments.

Credit card network convenience fee guidelines

Visa, Mastercard and American Express have guidelines that merchants must follow if they want to process card transactions on their networks. The regulations that card networks impose include but are not limited to:

American Express

When it comes to payments made with American Express, the convenience fee must be disclosed to the customer. The fee must be the same for all forms of payment in that channel (over the phone, online or by mail), and it can be charged on in-person payments, recurring payments and installments (such as subscriptions, utility bills and insurance premiums).


When payment is made with a Mastercard, credit card convenience fees must be disclosed to the customer as a fee for using the payment channel. Convenience fees can be charged for in-person, phone, online, kiosk or mail payments, but the merchant is required to contact Mastercard about their intent to charge fees at least 30 days ahead of time. The convenience fee is not allowed to be higher than other card-based payments.


When it comes to Visa credit card purchases, convenience fees cannot be charged for in-person transactions unless specific requirements are met. The convenience fee must be disclosed before the transaction is completed and must be a flat or fixed fee unrelated to the payment amount.

Different types of credit card processing fees

Interchange fees

Interchange fees are the charges that businesses pay to card issuers when a customer uses a credit or debit card at their store. When a merchant processes a customer’s transaction, an extra percentage of that sale is tacked on and paid by the merchant to the card issuer.

Assessment fees

Not to be confused with interchange fees, which are charged per credit card transaction, assessment fees are charged on a merchant’s total monthly sales completed with each issuer. At the end of each month, the merchant pays a percentage of that month’s sales completed by each credit card brand back to the issuer.

Payment processing fees

Merchants and businesses usually apply payment processing fees when customers pay bills with a credit card — like utilities, rent payments, tuition and more — online through a payment portal. These processing fees are usually added to the amount processed and the customer pays them on top of the bill.

When is a convenience fee worth it?

While credit card convenience fees can seem like a waste of money, they can definitely be worth it in the right circumstances. The key to finding out if a convenience fee is worth it is doing some basic math, and knowing exactly how your credit card’s rewards program works.

As an example, imagine your credit card offers 2 percent cash back on every purchase you make. You go to pay your $250 electric bill, and you notice that your utility company charges a $1.25 flat fee charge for payments made with a credit card.

In this case, you could pay $251.25 ($250 electric bill plus $1.25 convenience fee) with your credit card and earn $5 in cash back rewards in the process. This makes the convenience fee well worth paying in the long run.

Another instance where a credit card convenience fee can be worth it is when you are pursuing a generous credit card sign-up bonus. If you need to pay utility and other bills you have to reach the minimum spending threshold for a bonus worth $500 or more, convenience fees and surcharges tend to be a drop in the bucket and well worth paying.

How to avoid credit card convenience fees

If you want to avoid credit card convenience fees, you need to pay bills that require them with another form of payment. Instead of paying these bills with a credit card, you can:

  • Link your bank account using the account number and routing number to opt for ACH (automated clearing house) transactions. Since this is a payment directly from your bank account, no credit card payments are processed, thus there are no fees.
  • Try to pay in person, if possible.
  • Pay bills via the regular mail with a paper check.

You can also just avoid merchants and businesses that apply card processing fees in some cases, although this may not always be possible.

Bottom line

Fees tacked onto online credit card transactions aren’t new, and you’ve probably seen them when you pay for utilities or rent online. While convenience fees for processing online credit card payments are common, you can avoid them by directly linking your bank account for payments or paying with a debit card. You can also pay some of your bills in person or send a check via regular mail.

In some cases, however, it can make sense to pay a credit card convenience fee so you can pay with a credit card. This is typically true only when the rewards you earn exceed the cost of the fee, so make sure you do the math before you pay.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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