Which states ban credit card surcharges?

As of October 2026, Connecticut and Massachusetts prohibit surcharges by statute, and Maine bars private sellers from surcharging card payments. Puerto Rico also prohibits them, according to Visa. Oklahoma repealed its ban effective November 1, 2025 and now allows surcharges up to the lesser of 2% or actual cost. Cash discounts remain generally permitted in states that ban surcharges.

Can you charge a surcharge on debit cards?

No. Visa and Mastercard rules allow surcharges on credit cards only, and debit and prepaid cards can't be surcharged even when the customer runs a debit card as credit or signs instead of entering a PIN. Colorado's statute also expressly bars surcharges on debit cards, cash, checks and gift cards.

What is the maximum credit card surcharge?

Visa caps surcharges at the lower of your merchant discount rate for that card or 3%. Mastercard limits them to your cost of acceptance, with a ceiling of 4%. Some states set lower caps: Colorado 2% (or your actual merchant discount fee), Oklahoma the lesser of 2% or cost, and Minnesota 5%. New York and New Jersey limit it to your actual cost.

What's the difference between a surcharge and a cash discount?

A surcharge adds a fee on top of the posted price when a customer pays by credit card. A cash discount posts the card price and gives a reduction to customers who pay by cash or another method. Visa treats a program as a discount only if the card price is posted, alone or next to the cash price; if the card price is reached by adding a fee at checkout, it's a surcharge and its rules apply.

Do I have to tell Visa and Mastercard before surcharging?

Yes. Visa requires you to notify your acquirer (the bank or processor that handles your card sales) at least 30 days in advance, and Mastercard requires notice to both Mastercard and your acquirer at least 30 days before you begin. Your processor also has to send the surcharge amount in a dedicated data field.

Finance & accounting

Credit Card Surcharge Laws by State in 2026: What's Legal, the Caps and How to Disclose

Credit card surcharge laws by state in 2026: Visa's 3% cap, the debit ban, CT and MA bans, caps in CO, OK and MN, NY and NJ disclosure rules, and a worked example.

Edited by Sumeet YadavFounder & editor, MSMETOOLS · fact-checked against official sources

Updated October 2026 Verified against official sources 12 October 2026 17 min read

Credit card surcharge laws by state — MSMETOOLS guide cover

Contents (8)

1. Surcharge, convenience fee or cash discount: know which you're doing
2. Card network rules that apply in every state
3. The debit card ban
4. Credit card surcharge laws by state
5. Federal rules: the FTC fees rule and what's pending
6. Worked example: surcharge vs cash discount on a $1,000 job
7. Common mistakes and how to fix them
8. What to do next

Card fees take 2% to 3.5% of many small businesses' sales, so it's no surprise that more restaurants, contractors, medical offices and retailers now add a line on the bill for paying by credit card. Done correctly, that's legal in most of the US. Done wrong, it can bring fines from your processor, complaints to your state attorney general and unhappy customers. This guide sets out the card network rules that apply everywhere, the states that ban or limit surcharges as of October 2026, how to disclose them, the alternative of a cash discount, and a worked example of the numbers.

Quick answer

Credit card surcharges are legal in most states if you follow Visa and Mastercard rules: give your processor 30 days notice, surcharge credit cards only (never debit or prepaid), keep the fee at or below your cost (Visa caps it at 3%), and disclose it at the entrance, at checkout and on the receipt. Connecticut, Massachusetts and Maine bar them; Colorado, Oklahoma and Minnesota cap them; New York and New Jersey set strict disclosure rules.

Visa: lower of your merchant discount rate or 3%; Mastercard ceiling 4%
Debit and prepaid cards can't be surcharged anywhere
Oklahoma's ban ended Nov 1, 2025 — now lesser of 2% or cost
New York requires the total card price, including surcharge, to be posted
Cash discounts are allowed even in most states that ban surcharges

Surcharge, convenience fee or cash discount: know which you're doing

The rules depend on what you call the fee and how it works, so get the terms right before anything else.

A surcharge is an extra amount added to the price because the customer pays with a credit card. If your sign says "3% fee for credit cards" and the fee appears on the bill only when the customer hands over a card, that's a surcharge.

A cash discount works the other way round: the posted price is the card price, and customers who pay by cash, check or another non-card method get a reduction. Visa's rules allow discounts to steer customers to other payment methods, but only if prices are displayed either as the card price alone or with the card price and cash price side by side. If the card total is reached by adding a fee at the register, Visa says it may be treated as a surcharge.

Dual pricing is the side-by-side version of a cash discount, common at gas stations and in some restaurants: every item shows a cash price and a card price.

A convenience fee is a flat charge for using an alternative payment channel, such as paying a bill online instead of by mail, and it has its own separate network conditions. It's not a way around surcharge rules. Ask your processor in writing before you charge one.

Restaurant check presenter folder with a bill and receipt slips on a table — Restaurants are among the most common surchargers; New Jersey requires the surcharge amount on the menu itself.· Image: Dan4th (CC BY 2.0)

Card network rules that apply in every state

Federal law doesn't regulate credit card surcharges for ordinary retail sales. Surcharging became broadly possible in January 2013, when Visa and Mastercard changed their rules as part of an antitrust settlement with merchants. Those network rules still set the baseline everywhere, and state laws add to them.

Under Visa's rules, a US merchant that wants to surcharge must notify its acquirer, meaning the bank or processor that handles its card sales, at least 30 days in advance. The surcharge may apply to credit cards only. Its amount can't exceed the merchant discount rate for the card being surcharged or 3%, whichever is lower. The merchant must post a notice at the point of entry and the point of sale, for both store and online sales, and show the surcharge as a separate line on every receipt. Your processor also has to carry the surcharge amount in a specific field of the transaction message, which is why you can't simply add a line in your point-of-sale software without telling them.

You can surcharge at the brand level, meaning all Visa credit cards, or at the product level, meaning particular Visa credit products such as Visa Signature, but not both. Visa runs mystery-shopper audits and says an acquirer whose merchant surcharges improperly can be fined US$1,000 immediately, a cost that processors pass on in their merchant agreements.

Mastercard's rules are similar. It requires notice to both Mastercard and your acquirer at least 30 days before you start, limits the surcharge to your cost of accepting Mastercard credit cards, and bars surcharges on Debit Mastercard and prepaid cards. The federal government's GSA SmartPay program summarizes the combined ceiling as 4% in any state, and notes that merchants generally can't charge different surcharge amounts for different networks when a network imposes surcharging limits. Visa's own guidance makes the same point: you typically have to surcharge Visa on the same terms as any equal or higher-cost competitor.

How to start surcharging the compliant way

1
Check your state law
Confirm surcharges are legal where each location is. A business with stores in several states follows the law of each store's state.
2
Work out your cost of acceptance
Use your statements to find your effective credit card rate. Your surcharge can't exceed it, or 3% on Visa, or any lower state cap.
3
Notify your processor
Give written notice at least 30 days before you start, and notify Mastercard too. Ask the processor to enable the surcharge data field.
4
Post your disclosures
Signs at the entrance and checkout, notices on your website's home page or checkout page, verbal disclosure on the phone, and the amount on the receipt.
5
Exclude debit and prepaid cards
Your terminal or gateway must detect debit and prepaid cards and skip the surcharge automatically.

The debit card ban

Debit cards are the most common source of surcharge violations. Visa's rules say plainly that US merchants can't surcharge purchases made with a Visa debit or prepaid card, and that it makes no difference if a debit cardholder selects "credit" on the terminal, because choosing credit only means the transaction is signature-based rather than PIN-based. Mastercard's rules also exclude debit and prepaid cards.

Some states write the same prohibition into law. Colorado's statute bars processing surcharges on payments by cash, check, debit card (with or without a PIN) or gift card redemption. In practice, the safest approach is to use a terminal and gateway that identify the card type from the card number and apply the surcharge only to credit. A blanket "3% card fee" sign that applies to everything is one of the quickest ways to draw complaints.

Credit card surcharge laws by state

Most states don't have a specific surcharge statute, which means card network rules govern. The states below are the ones with laws that ban, cap or add disclosure rules, based on the statutes and state guidance cited in this guide as of October 2026. Visa's own list, last updated in February 2024, names Connecticut, Maine, Massachusetts, Oklahoma and Puerto Rico as prohibiting surcharges and Colorado, Minnesota, New Jersey and New York as having requirements; Oklahoma has since changed its law.

State surcharge rules at a glance (October 2026)

State	Status	Cap	Key rule
Connecticut	Banned	—	Conn. Gen. Stat. § 42-133ff (amended 2024): no fee that increases the total because of payment method
Massachusetts	Banned	—	M.G.L. c.140D § 28A: no surcharge for using a credit card; cash discounts allowed
Maine	Banned (private sellers)	—	9-A M.R.S. § 8-509; a discount from the regular price isn't a surcharge
Colorado	Allowed	2% or actual merchant discount fee	Signage required; no surcharge on cash, check, debit or gift cards
Oklahoma	Allowed from Nov 1, 2025	Lesser of 2% or actual cost	Notice at entry and POS, home page and checkout; none if you accept only credit cards
Minnesota	Allowed	5%	Tell customers orally and on a posted sign; online notice at checkout
New York	Allowed	Amount charged by the card issuer	Post the total credit card price including the surcharge
New Jersey	Allowed	Actual processing cost	Post the surcharge amount at entry and point of sale; on menus for restaurants
California	Allowed with care	Network rules	SB 478: fee must be in the advertised price if it can't be avoided

Connecticut

Status: Banned
Cap: —
Key rule: Conn. Gen. Stat. § 42-133ff (amended 2024): no fee that increases the total because of payment method

Massachusetts

Status: Banned
Cap: —
Key rule: M.G.L. c.140D § 28A: no surcharge for using a credit card; cash discounts allowed

Maine

Status: Banned (private sellers)
Cap: —
Key rule: 9-A M.R.S. § 8-509; a discount from the regular price isn't a surcharge

Colorado

Status: Allowed
Cap: 2% or actual merchant discount fee
Key rule: Signage required; no surcharge on cash, check, debit or gift cards

Oklahoma

Status: Allowed from Nov 1, 2025
Cap: Lesser of 2% or actual cost
Key rule: Notice at entry and POS, home page and checkout; none if you accept only credit cards

Minnesota

Status: Allowed
Cap: 5%
Key rule: Tell customers orally and on a posted sign; online notice at checkout

New York

Status: Allowed
Cap: Amount charged by the card issuer
Key rule: Post the total credit card price including the surcharge

New Jersey

Status: Allowed
Cap: Actual processing cost
Key rule: Post the surcharge amount at entry and point of sale; on menus for restaurants

California

Status: Allowed with care
Cap: Network rules
Key rule: SB 478: fee must be in the advertised price if it can't be avoided

States that ban surcharges

Connecticut prohibits a business from collecting any fee that increases the total amount of a transaction because of the way the customer pays. The Department of Consumer Protection says the current text of § 42-133ff reflects amendments in Public Act 24-142. Discounts for paying by cash are generally permitted, but get the details from the department before setting one up.

Massachusetts bars sellers from imposing a surcharge on a cardholder who chooses to pay by credit card instead of cash or check under chapter 140D, section 28A. The state's Division of Banks has read the rule to cover surcharges imposed through third parties, so outsourcing the fee to a processor doesn't help. Bills to loosen the rule have been filed in the 2025–2026 legislative session; check their status before relying on any change.

Maine prohibits a seller from imposing a surcharge on a cardholder who pays by credit or debit card instead of cash or check, defining a surcharge as any means of increasing the regular price for card users. It says a discount from the regular price isn't a surcharge, and it lets government agencies recover card costs on taxes, fines and permits under conditions.

States with caps

Colorado allowed surcharges from 2021 and gives sellers two options: a flat surcharge of up to 2% of the total, or a surcharge that doesn't exceed the merchant discount fee actually paid to process the transaction. Signs must be visible at the premises, and online sellers must show the notice before checkout. A violation makes the seller liable as a creditor under the state's consumer credit code.

Oklahoma repealed its long-standing ban through Senate Bill 677, effective November 1, 2025. Sellers may now surcharge credit cards if they post the amount clearly at the point of entry and point of sale for in-person sales and on the home page and payment page for online sales, and disclose it verbally on phone orders. The surcharge can't exceed the lesser of 2% of the transaction or the actual processing cost. If a business accepts only credit cards, it can't surcharge at all, and discounts for cash, check or debit have no limit.

Minnesota allows surcharges of up to 5% of the purchase price if the seller tells in-person customers orally at the time of sale and on a posted sign, and posts a notice during online checkout. In practice, the Visa and Mastercard caps are lower than Minnesota's, so the network limit is the one that binds.

Small business front counter with a cash register and paperwork behind a service window — Most state laws require the surcharge notice at both the entrance and the point of sale.· Image: anacondaautomotiveinc (Public Domain Mark 1.0)

States with disclosure-focused rules

New York changed its law in February 2024. Under General Business Law § 518, a seller that surcharges credit card payments must clearly and conspicuously post the total price for paying by credit card, including the surcharge, and can't charge more than that posted price. Alternatively, it can post two prices, the cash price and the card price, next to each other. The surcharge can't exceed the amount the card issuer or network charges the business for the transaction. Violations carry a civil penalty of up to $500 each, enforceable by municipalities. A sign that says only "3% fee for cards" isn't enough in New York; the card price itself must be visible.

New Jersey's law, P.L. 2023, c.146, bars credit card surcharges above the seller's actual processing cost. The Division of Consumer Affairs says you must disclose the amount of the surcharge, which can be a percentage, before the customer incurs any charge; a sign that only says a surcharge "won't exceed our costs" doesn't comply. Non-restaurant sellers post the amount at the point of entry and the point of sale. Restaurants post it in the customer service area and on menus, including menu boards and QR-code menus. Online and kiosk sellers must show it on the checkout page, and phone sellers must say it before processing. A flat rate is allowed if it doesn't exceed your actual cost.

California has no current surcharge-specific statute that the Attorney General's office describes as being enforced, but its "honest pricing" law, SB 478, effective July 1, 2024, matters. The Attorney General's FAQ says a credit card fee doesn't have to be included in an advertised price if the customer can avoid it by paying another way, but if a business accepts only credit cards, the fee is mandatory and must be included in the advertised price.

How surcharge rules have changed

Jan 27, 2013

Visa and Mastercard rules start allowing US credit card surcharges

Jul 7, 2021

Colorado replaces its ban with a 2% or cost cap (SB 21-091)

Feb 2024

New York requires the total credit card price to be posted (GBL § 518)

Jul 1, 2024

California SB 478 honest pricing law takes effect

May 12, 2025

FTC fees rule for tickets and short-term lodging takes effect

Nov 1, 2025

Oklahoma ends its ban; lesser of 2% or cost

Jun 9, 2026

Court grants preliminary approval to Visa/Mastercard merchant settlement

Federal rules: the FTC fees rule and what's pending

Two federal developments touch surcharging. The Federal Trade Commission's Rule on Unfair or Deceptive Fees took effect on May 12, 2025, but applies only to businesses selling live-event tickets or short-term lodging. For those sellers, the FTC says a card fee is optional, and can be left out of the advertised total price, if a fee-free payment method is available; it must still be disclosed and included in the final amount before payment. If customers can only pay by card, the fee is mandatory and must be in the total price.

The second is the proposed Visa and Mastercard settlement with merchants. Visa's November 2025 filing says it would give merchants more options to surcharge, including surcharging Visa or Mastercard credit cards even when they don't surcharge other networks, and let merchants choose which categories of credit cards to accept. A federal judge gave it preliminary approval in June 2026, but final approval was still pending as of October 2026, so today's rules continue to apply. Our guide to credit card processing fees covers the rest of the settlement's terms.

Worked example: surcharge vs cash discount on a $1,000 job

A plumbing company bills $1,000 for a repair. Its processing statements show an effective credit card cost of 2.6%. Here's what it may charge a customer who pays by credit card in different states, and what a cash discount alternative looks like.

In most states, the Visa rule is the binding limit: the lower of the 2.6% merchant discount rate or 3%, so a maximum surcharge of $26 and a card total of $1,026. In Colorado, the flat option caps it at 2%, or $20; the company could charge up to its actual merchant discount fee on the transaction instead, if it can document that cost. In Oklahoma, the cap is the lesser of 2% or cost, so $20. In New York, $26 is allowed, but the invoice and any posted price must show the $1,026 card total, not only the $1,000 base. In Connecticut and Massachusetts, the company can't add a surcharge at all.

$1,000 invoice, 2.6% card cost	Max credit surcharge	Card total	Debit card total
Most states (Visa rule)	$26.00	$1,026.00	$1,000.00
Colorado (flat option)	$20.00	$1,020.00	$1,000.00
Oklahoma	$20.00	$1,020.00	$1,000.00
New York	$26.00, total price posted	$1,026.00	$1,000.00
Connecticut / Massachusetts	Not allowed	$1,000.00	$1,000.00

A cash discount gets to a similar place differently. The company quotes $1,026 as its standard price and offers a 2.53% discount, $26, to customers who pay by check, cash or ACH bank transfer. Because the card price is the posted price and nothing is added at checkout, it's a discount rather than a surcharge, and the discount applies equally to debit cards if the company chooses. In states that ban surcharges, this is the main lawful way to recover card costs, but follow the state's rules on how discounts must be disclosed.

Run your own figures with the payment fee calculator to see how much of a card fee a surcharge or discount recovers on your typical ticket.

Check what a card payment costs before you set a surcharge

AmountPercentage FeeFixed Fee

Amount Charged₹1,000.00

Processing Fee₹29.30

Effective Fee Rate2.93%

You Receive₹970.70

Open the full Payment Processing Fee Calculator (PDF, save, compare)

Common mistakes and how to fix them

Surcharging debit cards. This is the most frequent violation. Fix it with a terminal or gateway that detects card type from the card's BIN and applies the fee only to credit.

Charging more than your cost. A flat 3.5% or 4% "card fee" exceeds Visa's 3% cap and, for most small businesses, their actual cost. Calculate your effective credit card rate every few months and adjust.

Skipping the processor notice. Surcharging without the 30 days notice, or without the transaction data field, can bring network fines that your processor will pass to you. Get written confirmation that surcharging is enabled.

Weak disclosures. Signs need to state the amount, not just that a fee exists, in New Jersey, and the full card price in New York. Put the notice at the entrance, at checkout, online before the customer commits, and on the receipt.

Surcharging in a ban state. Multi-state businesses must turn surcharging off at locations in Connecticut, Massachusetts and Maine, and should consider a cash discount there instead.

Calling a surcharge a "service fee". Relabeling a card fee doesn't change what it is, and vague "service" or "administrative" charges can raise separate junk-fee issues under state consumer protection laws.

Official links

What to do next

Start with your statements: calculate your effective credit card rate so you know the most you can recover. Check the law for every state where you have a location, then decide between a surcharge and a cash discount. Give your processor written notice, set your terminal to skip debit cards, and put up signs before the first surcharged sale. If most of your revenue comes from invoices to business customers, moving them to ACH, explained in our ACH payments guide, may save more than any surcharge.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

In most US states, yes, as long as you follow card network rules and any state law. You must notify your processor 30 days before starting, surcharge only credit cards, keep the fee at or below your cost of acceptance (and no more than 3% on Visa), and disclose it at the entrance, at checkout and on the receipt. Connecticut, Massachusetts and Maine bar surcharges by private sellers.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 12 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1.U.S. Merchant Surcharge Q and A — Visa · accessed 12 October 2026
2.Merchant Surcharging Considerations and Requirements — Visa · accessed 12 October 2026
3.Smart Bulletin No. 017 — Surcharges — U.S. General Services Administration · accessed 12 October 2026
4.New York General Business Law § 518 — New York State Senate · accessed 12 October 2026
5.Credit Card Surcharges — Frequently Asked Questions (P.L. 2023, c.146) — New Jersey Division of Consumer Affairs · accessed 12 October 2026
6.Enrolled Senate Bill No. 677 (2025) — Oklahoma Legislature · accessed 12 October 2026
7.C.R.S. § 5-2-212 — Credit card surcharges — Colorado Revised Statutes (via Public.Law) · accessed 12 October 2026
8.Minnesota Statutes § 325G.051 — Surcharges — Minnesota Office of the Revisor of Statutes · accessed 12 October 2026
9.Maine Revised Statutes Title 9-A § 8-509 — Maine Legislature · accessed 12 October 2026
10.What is the Connecticut surcharge law? — Connecticut Department of Consumer Protection · accessed 12 October 2026
11.California Attorney General — SB 478 Hidden Fees FAQ — California Department of Justice · accessed 12 October 2026
12.Rule on Unfair or Deceptive Fees — Frequently Asked Questions — Federal Trade Commission · accessed 12 October 2026
13.Visa Inc. Form 8-K — proposed settlement (Nov 10, 2025) — U.S. Securities and Exchange Commission (EDGAR) · accessed 12 October 2026

MSMETOOLS is an independent platform and is not affiliated with any government agency, ministry or department.

We provide tools, guides and information for general educational purposes only. Always refer to official government websites for the latest and most accurate information.