North Carolina Credit Card Surcharge Law: HB 13, Caps, and Disclosure

North Carolina credit card surcharge law is, at the moment, not really state law at all: no North Carolina statute regulates or bans merchant surcharges on credit card transactions. What limits a merchant are the rules imposed by Visa and Mastercard, plus general consumer protection law that punishes deceptive practices. That gap may close soon. House Bill 13, pending before the General Assembly as of mid-2025, would cap surcharges at 2% and require specific disclosures, with a proposed effective date of January 1, 2026.¹

What the Rules Are Right Now

The bill summary for HB 13 confirms the current state of play: “State law does not currently regulate charges imposed by merchants on customers for paying by credit card or charge card.”¹ So the constraints a North Carolina merchant faces come from the card networks and their payment processors, not from Raleigh.

How High the Surcharge Can Go

Visa and Mastercard both limit a surcharge to the merchant’s actual cost of accepting the card, known as the merchant discount rate. If a merchant pays 2.5% to accept Mastercard credit cards, the surcharge on those transactions cannot exceed 2.5%. Mastercard sets an absolute ceiling of 4%.² Visa lowered its ceiling from 4% to 3% effective April 15, 2023, which makes 3% the practical maximum for most transactions.³

Notice Before You Start

A merchant that wants to surcharge must give both the card network and its acquiring bank at least 30 days’ written notice before doing so.² Skipping the notification can lead to fines or termination of your merchant account. Confirm the process with your payment processor before posting any signage.

Disclosure at the Register

Visa requires the surcharge to be disclosed at the point of entry to the store, at the point of sale, and on every receipt, with the surcharge amount broken out as a separate line item.³ Mastercard’s rules are similar: disclosure at the point of sale and on the customer’s receipt.² For online sales, Visa requires a clear notice during checkout and on the digital receipt.

Debit and Prepaid Cards Are Off Limits

Card network rules flatly prohibit surcharging debit and prepaid card transactions, even if the customer selects “credit” on the keypad. Visa’s FAQ puts it plainly: “The ability to surcharge only applies to purchases made with a credit card, and only under certain conditions.”³ This is where terminal configuration matters. A point-of-sale system that applies a flat surcharge to every card without distinguishing debit from credit will produce prohibited surcharges on debit transactions, and that can trigger fines or loss of the merchant account.

What HB 13 Would Change

If enacted, House Bill 13 would create North Carolina’s first statutory framework for credit card surcharges. As of late 2025 the bill remained in the House Finance Committee, with a proposed effective date of January 1, 2026.¹ Its main provisions:

A 2% cap on any credit or charge card surcharge, well below the Visa and Mastercard ceilings.
Signage at the point of entry and the register for in-person transactions, disclosure on both the home page and checkout page for online sales, and a verbal disclosure before a customer commits by phone.
No surcharge is permitted if the merchant does not also accept cash or another non-card form of payment at the time of the transaction.
Cash discounts remain allowed, provided the discount is offered to all customers and its availability is disclosed.
The Secretary of Commerce would enforce the law, with civil penalties of up to $500 per violation. A first-time violator can avoid the penalty by coming into compliance within 30 days, making affected consumers whole, and staying compliant.

Because HB 13 has not passed, none of this is currently binding. Merchants should track the bill and be ready to adjust point-of-sale settings and signage quickly if the January 2026 date holds.

Cash Discounts Versus Surcharges

Some merchants avoid the surcharge rules entirely by setting a higher posted price and offering a discount to customers who pay with cash or check. Federal law protects this approach. The Durbin Amendment bars card networks from restricting a merchant’s ability to offer cash discounts.⁴ HB 13 would also expressly permit cash discounts if offered to all customers and clearly disclosed.¹

The label a merchant chooses does not control the legal treatment. A discount starts from a higher posted price and reduces it for cash payers, so no customer ever pays more than the marked price. A surcharge starts from a lower advertised price and adds to it for card users. If the checkout total exceeds the price the customer saw on the shelf, that is a surcharge, whatever the processor calls it. Calling a surcharge a “cash discount” invites both consumer complaints and enforcement scrutiny.

Sales Tax on the Surcharge

North Carolina treats a credit card surcharge as part of the sales price. The “sales price” includes the total consideration for the item, together with charges by the retailer for services necessary to complete the sale. Practically: if the underlying item is taxable, the surcharge is taxable too; if the item is exempt, so is the surcharge on that transaction. Point-of-sale systems should calculate tax on the combined total, not on the pre-surcharge amount.

If You Were Charged a Surcharge You Think Was Improper

Consumers have a few routes. A complaint to the North Carolina Attorney General’s office can trigger an investigation under the state’s Unfair and Deceptive Trade Practices Act. The UDTPA reaches deceptive surcharge practices, such as hiding the fee until after the sale or misstating its amount, and a successful private plaintiff recovers treble damages automatically; North Carolina courts have held that trebling is a right of the prevailing plaintiff, not a matter of judicial discretion.⁵ Attorney’s fees are available only if the court finds the merchant acted willfully and unreasonably refused to resolve the matter.

Cardholders can also dispute the charge directly with the card issuer under the federal Fair Credit Billing Act. A written dispute sent within 60 days of the billing statement triggers an investigation, and an improper charge can be reversed through the chargeback process.⁶ For merchants, chargebacks tied to undisclosed surcharges are costly and damaging to processing history, which is another reason to keep disclosures visible and accurate.

1
North Carolina General Assembly. House Bill 13 – Charges for Credit and Charge Cards
2
Mastercard. Merchant Surcharge FAQ
3
Visa. Surcharging Credit Cards – Q&A for Merchants
4
Board of Governors of the Federal Reserve System. Small Entity Compliance Guide for Regulation II – Debit Card Interchange Fees and Routing
5
North Carolina General Assembly. North Carolina General Statutes Chapter 75 – Monopolies, Trusts and Consumer Protection
6
Federal Trade Commission. Fair Credit Billing Act