Print Share


Improving Your Financial Life

Blog > 2013 > January > Watch for Credit Card Surcharges Startin...
January 25, 2013

Watch for Credit Card Surcharges Starting January 27th

Beginning January 27th, merchants can pass along their payment processing costs to consumers who choose to pay with either a VISA credit card or MasterCard. This is the result of a court settlement between retailers and the credit card industry.

If a merchant decides to adopt this surcharge, also known as a checkout fee, you could see your purchase amount during a transaction increase up to as much as 4.00%. For example, if you made a $50.00 purchase with your credit card, a merchant could actually charge you $52.00 for using your credit card instead of paying with cash or your debit card.

Merchants are required to disclose the credit card surcharge clearly. Watch for notices at store entrances and at the point of sale. If you are shopping online, then look for the notice on the merchant website’s home page. At the checkout screen online, the merchant must also disclose the surcharge.
The disclosure must include the amount of the surcharge, the fact that the fee is being charged by the merchant, and that the fee does not exceed the merchant’s cost to accept credit cards. The dollar amount of the surcharge must appear on your transaction receipt.
Merchants are not allowed to impose a credit card surcharge in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, or Texas. Credit card surcharges are not permissible by law in these states.
The following are some frequently asked questions regarding this new surcharge:
What is a credit card surcharge?
An additional fee that a merchant (retailer) adds to your purchase when you use a CREDIT CARD for payment.

How will I know if the merchant is going to surcharge my credit card?
Look for signs or postings at the store entrance and the point of sale warning of merchant’s fee. Carefully review your receipt; merchants are required to disclose the actual dollar amount of the surcharge.

How much can the merchant charge?
They may not charge any more than the applicable merchant discount rate for the credit card transaction. The rates are generally between 1.5% to 3%, but in no case can be higher than 4%.
Can I be surcharged if I press the “credit button” while using my debit or prepaid card?
No. Regardless of how your debit or prepaid card is processed at the point of sale, surcharging is NOT permitted.
Will all merchants begin charging me for my credit card?
No, merchants can choose to charge or not. The 10 U.S. states have laws restricting merchants from surcharge on credit cards are California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.
What do I do if the merchant is charging over 4% on my credit card or charging me on my debit or prepaid card?
To report excessive payment surcharges, or surcharging debit and prepaid card transactions, you can visit and fill out the Report a Merchant Violation form.
If I shop online, how will I know if I am being surcharged?
As with any other type of store, the online stores are required to disclose if they will be imposing the credit card surcharge.
Where can I get more information about payment card surcharging?
For more information, you can visit
Category: FCFCU
Your savings federaly insured to at least $250,000 and backed by the full faith and credit of the United States Government: NCUA, Equal Housing Lender, ESI