My club instated a card-only payment policy, including processing fees; is it legal?

Depending on the state where the business is located, adding a card surcharge might be illegal – plus, refusing other payment forms might be discriminatory


If an organization you belong to instates a credit card-only policy and wants you to pay processing fees, you might want to ask them to reconsider. Depending on the state where you live, this could be against the law.

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Dear Your Business Credit,

I am confused because I have read contradicting articles. My question is: Is it legal to charge a surcharge on a credit card transaction when that is the ONLY choice as form of payment?

I am a member of a women club. You could pay your dues with a check or credit card – there is/was a fee always with this credit card choice

Last year the club stated they are not accepting checks anymore and you MUST pay with a credit card and you MUST pay the processing fee.

Dues are $600 and the processing fee is $16. Thanks for the info. – Julie

Dear Julie,

It sounds like you don’t like the idea that the club is requiring you to pay by credit card. Some states ban surcharges so, depending on your state, adding one could be illegal, which you might want to point out to the leadership of the club, if the club is based in any of these states.

Check out all the answers from our credit card experts.

Ask Elaine a question.

See related: What are my rights regarding credit card surcharges?

Credit card surcharges are illegal in some states

The states with no-surcharge laws are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas, according to a list compiled by the National Conference of State Legislatures. Surcharges are also illegal in Puerto Rico. Adding an illegal surcharge could expose the club to liability, so the leaders will probably appreciate knowing this.

Some merchants get around this by offering a discount to cash-paying customers. These discounts are also subject to the rules of the major credit card issuers.

For instance, in a Q&A on its site, Visa states that “a merchant is permitted to offer discounts for paying in cash. However, the discount must be given as a reduction from the standard price.”

It does not appear, based on what you are saying, that the club is structuring its payment options in such a way that could be described as offering a discount to cash paying customers, since no one is allowed to pay in cash. This is the only other option for recouping the credit card processing costs.

If you want to bring back the option of paying cash, you might mention that one way the club could recoup its costs is through such a discount – provided it reinstated the option to pay by cash or check.

Your club may want to consider one other aspect of its credit-card only policy that goes beyond convenience: what it means to require members to use credit cards. As a member, you are in a perfect position to bring this up.

Why a ‘cards only’ payment policy might be unwillingly discriminatory

Some people do not use credit cards because of their personal or religious beliefs. If a business or organization does not give them another payment option, they may not feel welcome.

Others do not have access to credit. For instance, if the club wants to attract members who are recent college graduates, it may take them a while to get access to credit. That may be an issue for a club that is trying to ensure its continuity by attracting young professionals.

But it’s not just young adults who are affected.

A recently divorced woman who was married for a long time, stepped out of the workforce to raise her children, relied on her husband’s credit over the years and never built up credit in her name might have difficulty getting a credit card now, even if she still seems, on the surface, to be living the same lifestyle as she did before the divorce.

A woman in this situation would have no way to pay the club’s fees under the current system.

People don’t always want to share the personal financial details of their lives, so it’s important for the club to consider the implications of only accepting credit cards and the unintended messages policies like this one might send.

Many clubs are very proud of their inclusiveness, and subtleties, such as payment policies, can be a great way to reinforce that you truly embrace this.

The leadership of the club may not have considered this fully, and I’m guessing they will appreciate your bringing it up if they hope to continue growing the club in the future.

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