Apr 05, 2021
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About this Deal
Have you ever gone to pay for something with a credit card, only to be told that you'd be charged a fee for using a card instead of cash? These fees are called credit card surcharges, and they're more common than you might think. Retailers may decide to charge these fees to help offset the credit card processing fees they have to pay.
In some states, however, it's illegal for businesses to pass credit card processing fees on to the customer. Keep reading to learn more and see which states have put an end to this practice.
What are credit card surcharges?
Credit card surcharges are fees that are added to a credit card transaction. Some retailers choose to add this fee to a customer's bill to help cover the cost of credit card processing fees that the business has to pay. In most cases, credit card surcharges are small. For example, a customer might be charged $1.00 to use a card.
Why do companies make customers pay a fee to use credit cards?
Business owners have to pay credit card processing fees. These fees can vary depending on the type of credit card used and the payment processing system. These fees can add up for a business, especially if the majority of customers use credit cards. Because it's so common to use credit cards, some business owners choose to pass some of the fees on to customers in the form of a credit card surcharge.
While most states allow this practice, businesses must note these fees according to federal law.
It's illegal to charge fees in these states
In some states, retailers can't add surcharges or convenience fees. Here are the five states where it's illegal: Colorado, Connecticut, Kansas, Maine and Massachusetts.
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