Credit card surcharge laws by state fall into three buckets: a handful of states ban surcharges outright, a few more cap them below the limits set by the card networks, and the rest let merchants add a fee as long as they disclose it and stay within Visa’s 3 percent and Mastercard’s 4 percent ceilings. In every state, the surcharge can never exceed what the merchant actually pays to process the transaction, and debit card surcharges are prohibited nationwide.
States That Ban Credit Card Surcharges
A short list of jurisdictions still enforces an outright ban. If you’re in one of these places, a merchant cannot legally charge you more for using a credit card than for paying with cash or check.
- Connecticut prohibits any seller from imposing a surcharge on a buyer who uses a credit card or any other payment method. A 2024 amendment lets the Commissioner of Consumer Protection impose civil penalties up to $500 per violation after a hearing.1Justia. Connecticut Code 42-133ff – Surcharge Based on Method of Payment Prohibited
- Massachusetts bans credit card surcharges under General Laws chapter 140D, section 28A.2General Court of Massachusetts. Massachusetts Code Chapter 140D – Section 28A
- Maine prohibits surcharges on both credit and debit card transactions under Title 9-A, section 8-509. The statute defines a surcharge as any way of increasing the regular price for a cardholder that isn’t imposed on cash customers.3Maine State Legislature. Maine Code 9-A 8-509 – Credit Card and Debit Card Surcharge Prohibition
- Puerto Rico forbids merchants from imposing a surcharge on consumers paying with a credit card.4Justia. Puerto Rico Title Ten – Prohibition on Surcharge for Credit Card Use
- Kansas also keeps a surcharge ban on the books.
Cash discounts remain legal in all of these jurisdictions, which is a distinction worth keeping in mind when you see pricing that looks like a workaround.
States Where Surcharge Bans Were Struck Down
Several states passed surcharge bans that courts later found unconstitutional on First Amendment grounds. The core reasoning: a law that forbids calling a price difference a “surcharge” while allowing the identical difference as a “cash discount” regulates speech rather than conduct.
California still has a surcharge ban in Civil Code section 1748.1, but it became effectively unenforceable after the Ninth Circuit’s 2018 decision in Italian Colors v. Becerra. The California Attorney General applies that ruling to similarly situated merchants, so surcharges are permitted as long as pricing isn’t misleading.5State of California Department of Justice. Credit Card Surcharges
Florida’s ban under section 501.0117 was held unconstitutional in Dana’s Railroad Supply v. Attorney General.6The 2025 Florida Statutes. Florida Statutes 501.0117 Florida merchants can surcharge, provided the fee is disclosed before the customer completes the purchase.
Texas section 604A.0021 of the Business and Commerce Code still bans surcharges on its face, but a federal district court ruled the statute unconstitutional as applied to merchants charging only enough to cover their actual processing costs. The Texas Attorney General has taken the position that the ruling is limited to the parties in that case, and that surcharges above the merchant’s processing fee could still violate the statute. The result is an unsettled landscape where some Texas merchants surcharge openly and others don’t.
States That Cap Surcharge Amounts
Some states expressly allow surcharges but set a lower ceiling than the card networks would.
Colorado
Colorado gives merchants a choice under section 5-2-212: charge up to 2 percent of the transaction, or charge the actual merchant discount fee, but not both. The flat 2 percent option doesn’t require documentation; the actual-cost option can go higher but has to be substantiated. Either way, the surcharge appears as a separate line item on the receipt, and Colorado requires specific statutory language on the merchant’s signage or website.7Justia. Colorado Code 5-2-212 – Surcharges on Credit Transactions
Minnesota
Minnesota rewrote its law in 2023 to allow surcharges up to 5 percent of the purchase price. Merchants have to give oral notice at the time of an in-person sale and post a conspicuous sign, show the surcharge on the checkout or order summary page online, or give oral notice for telephone sales. A violation carries a civil penalty up to $500 and a refund of the surcharge to the buyer.8Minnesota Office of the Revisor of Statutes. Minnesota Statutes 325G.051 – Surcharges on Credit Cards Minnesota’s 5 percent cap is the highest explicit state cap, but Visa’s 3 percent ceiling still limits Visa transactions in practice.
Oklahoma
Oklahoma’s statutes overlap. Section 14A-2-211 allows surcharging capped at 2 percent of the transaction or the merchant’s actual processing cost, whichever is less.9Justia. Oklahoma Code 14A-2-211 – Discounts Inducing Payment by Cash, Check or Similar Means A separate provision, section 14A-2-417, broadly prohibits surcharges with exceptions for educational institutions and municipalities, and has been the subject of constitutional challenges.10Justia. Oklahoma Code 14A-2-417 – Surcharge for Use of Credit or Debit Card The safest reading is that 2 percent is the ceiling.
New York
New York allows surcharges but caps them at the amount the credit card company actually charges the business, and takes a distinctive approach to disclosure. Merchants must display the total price including the surcharge, or use two-tier pricing that posts the credit card price alongside the cash price.11New York State Senate. New York Code GBS 518 – Credit Card Surcharge Notice Requirement A December 2023 law clarified those requirements.12Governor of New York. Governor Hochul Announces New Law to Clarify Disclosure of Credit Card Surcharges If a product costs $100 and the surcharge is 3 percent, the price tag seen by a credit card customer has to read $103, not $100 with a surprise at checkout.
The Visa and Mastercard Caps That Apply Everywhere Else
In the roughly 40 states without a specific surcharge statute, Visa’s and Mastercard’s rules set the limits. Every merchant that accepts those brands agrees to follow them.
Visa caps the surcharge at the merchant’s actual processing cost or 3 percent of the transaction, whichever is lower.13Visa. U.S. Merchant Surcharge Q and A Mastercard sets its ceiling at 4 percent or the merchant’s actual cost, whichever is lower.14Mastercard. Mastercard Credit Card Surcharge Rules and Fees for Merchants Most merchants pay processing fees of 1.5 to 3.5 percent, so the “actual cost” limit usually bites before the percentage cap does.
Where state law is stricter, state law wins. A 2 percent state cap means 2 percent, even though Visa would tolerate 3 percent. Where state law bans surcharging, the network rules don’t override that ban.
Debit Cards Are Off Limits Everywhere
No state permits surcharges on debit card transactions. The prohibition comes from Visa’s and Mastercard’s rules, which exclude debit from their surcharging frameworks because the money moves straight from the cardholder’s bank account. Running a debit card as “credit” at the terminal doesn’t change that; it’s still a debit transaction. Prepaid cards and government benefit cards get the same protection. A merchant that surcharges a debit transaction can be forced to refund the fee and can lose card-processing privileges from the networks.
Cash Discounts Are Legal Everywhere
A cash discount lowers the price for customers who skip the credit card. A surcharge raises it for customers who use one. The math can be identical, and the legal treatment is not.
Cash discounts are legal in every state and territory, including the ones that ban surcharges. Maine’s statute spells it out: “a discount or reduction from the regular price is not a surcharge.”3Maine State Legislature. Maine Code 9-A 8-509 – Credit Card and Debit Card Surcharge Prohibition Florida’s ban carries the same carve-out.6The 2025 Florida Statutes. Florida Statutes 501.0117 That same linguistic asymmetry is what led courts in California, Florida, and Texas to find the surcharge bans constitutionally suspect. For a customer, this means a store in a ban state can still legally give you a few percent off for paying cash, as long as the discount is posted and available to everyone.
Disclosure Rules You Should See as a Customer
Even in states with no surcharge statute, the card network rules require a three-stage disclosure. If you don’t see all three, something is wrong.
A sign has to be posted at the entrance of a physical store, so you know about the surcharge before you shop. The surcharge has to be disclosed again at the point of sale, giving you a chance to switch to cash or debit. And it has to appear as a separate line item on your receipt, so you can confirm the amount.15Visa. Surcharging Credit Cards Q&A for Merchants
Online, the surcharge has to appear before you complete checkout. Not on the confirmation screen after your card has already been charged. In Connecticut, a disclosure failure is treated as an unfair or deceptive trade practice, which opens the door to a Department of Consumer Protection investigation.16Connecticut Department of Consumer Protection. Credit Card Surcharge
What to Do if You Were Illegally Surcharged
If a merchant surcharged you in a ban state, surcharged your debit card, or exceeded your state’s cap, keep the receipt. The receipt showing the surcharge as a line item is the single most useful piece of evidence you have.
You can report the merchant to Visa through its violation report form, or to Mastercard through its customer support channels. Both networks investigate internally and can fine the merchant or restrict its processing privileges, though they typically don’t update the complainant on the outcome.
Your state attorney general or department of consumer protection is the other path. Connecticut treats surcharge violations as unfair or deceptive trade practices and lets the consumer protection commissioner investigate.1Justia. Connecticut Code 42-133ff – Surcharge Based on Method of Payment Prohibited Minnesota authorizes a $500 civil penalty per violation and a refund of the surcharge to the buyer.8Minnesota Office of the Revisor of Statutes. Minnesota Statutes 325G.051 – Surcharges on Credit Cards Penalties elsewhere vary, but filing a complaint with the right state agency is how you get your money back.