Is it Illegal to Add a Surcharge on Credit Card Transactions?

The use of a credit card when making a purchase generally costs the vendor who is receiving the payment some money. This is because the credit card company charges the vendor for each transaction charged, or else a flat rate for the processing of customer's transaction. In some cases, the vendor may attempt to pass this on to the customer by charging a surcharge for the use of a credit card. While not illegal, this practice is forbidden by most credit card companies.

Credit Card Surcharges

A credit card surcharge can be defined as a fee that is passed on to the consumer by a merchant as a fee for paying for the transaction with a credit card. A credit card surcharge will only be considered one if it charged specifically for the use of the credit card and not for any other payment method. Sometimes, these surcharges are referred to as convenience fees.


As of April 2011, there are no state or federal laws that specifically forbid merchants from charging individuals for the use of a credit card when making a purchase. Therefore, a vendor is not violating any criminal penalties when he does so. However, if the charging of a fee violates a private contract, he may be in violation of civil law, such as through a breach of contract.

Company Policy

Many credit card companies specifically forbid vendors from charging fees to customers for the use of a credit card. This is because doing so may dissuade the consumer from using a credit card to make the purchase. This is spelt out in the contract a vendor signs with a credit card company. If a vendor does add a surcharge, she may be violating this legal agreement and could face a suit from the credit card company.


According to Credit Today, while most credit card companies, such as MasterCard and American Express, specifically prohibit vendors from charging individuals for the use of a credit card, seldom will these companies actually penalise a vendor for doing so, if ever, so, while the policy is on the books for many companies, it is seldom enforced, and a consumer may have little recourse if a vendor does charge a fee.

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About the Author

Michael Wolfe has been writing and editing since 2005, with a background including both business and creative writing. He has worked as a reporter for a community newspaper in New York City and a federal policy newsletter in Washington, D.C. Wolfe holds a B.A. in art history and is a resident of Brooklyn, N.Y.

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