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Credit Card Surcharge Laws by State (2026)

Pick a state to see whether you can surcharge credit cards there, the cap that applies, and what you have to disclose. For small-business owners adding a card surcharge, and the bookkeepers setting it up in the books. Reviewed June 2026. General information, not legal advice.

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Rules that apply in every state

Debit and prepaid cards: never
Debit and prepaid cards can never be surcharged, in any state. The Durbin Amendment (Federal Reserve Reg II) and the card-network rules prohibit it nationwide.
Never above your cost
A surcharge can never exceed your actual cost of accepting that card. Surcharging is a cost-recovery mechanism, not a profit center.
Disclose it, every time
Disclose the surcharge wherever it's legal: a sign at the point of entry, a notice at the point of sale (online and in person), and a separate line item on every receipt.
Notify the networks first
Before you start surcharging, you must notify the card networks (Visa/Mastercard) and your acquirer/processor in writing, typically 30 days in advance.

Card-network caps: Visa 3%, Mastercard 4%, each also limited to your cost of acceptance. If you take Visa, 3% is the working ceiling.

Reviewed June 2026. This is general information, not legal or tax advice. Surcharge law changes and varies by situation, so confirm the current rule with the linked statute tracker and your card processor before you start surcharging.

Is it legal to charge a credit card fee?

In most of the country, yes, with conditions. A credit-card surcharge is a fee you add to recover the cost of accepting the card. It is legal in the majority of states as long as you stay within the card-network cap and your own cost of acceptance, and you disclose it before the customer pays. The exceptions are a small number of states that ban it, plus debit and prepaid cards, which can never be surcharged anywhere.

The lookup above gives the rule for a specific state. The rest of this page covers the parts that apply everywhere: the caps, the disclosure rules, and how to record the surcharge once you start collecting it.

Which states ban credit card surcharges?

3 states ban credit-card surcharging outright: Connecticut, Maine, and Massachusetts. In those states you cannot add a surcharge at checkout, though offering a cash discount instead is still allowed.

A few states are less clear-cut. California does not ban surcharges by name, but its price-transparency law requires the advertised price to include mandatory fees, so a separate surcharge added at checkout is effectively off the table; the cost has to be built into your listed price. Texas and Oklahoma have surcharge bans on the books that federal courts ruled unconstitutional, so they are not enforced and surcharging is permitted in practice. The lookup flags these contested states rather than forcing them into a simple yes or no.

How much can you surcharge?

Two limits apply at once, and the lower one wins. The card networks cap surcharges at 3% for Visa and 4% for Mastercard, so if you accept Visa, 3% is the working ceiling. On top of that, a surcharge can never exceed your actual cost of accepting that card. Surcharging is meant to recover cost, not to turn a profit, and several states write that cost-of-acceptance limit directly into law.

A handful of states set their own tighter cap. Colorado limits the surcharge to 2% or your cost, whichever is lower. New York, New Jersey, Nevada, South Dakota, and Georgia hold it to your cost of acceptance. When a state cap and the network cap both apply, charge no more than the lower of the two.

What you have to disclose

Disclosure is required everywhere surcharging is legal, and the rules are specific. Post a sign at the point of entry, show a notice at the point of sale (online and in person), and list the surcharge as a separate line item on every receipt. The customer has to be able to see and avoid the fee before they pay.

There is also a step before you charge anyone: you have to notify the card networks and your processor in writing, usually 30 days in advance, that you intend to surcharge. Skipping that notice puts you out of compliance even where surcharging is otherwise perfectly legal.

How to record a credit card surcharge in your books

A surcharge you collect is income, not a discount on your processing bill. Record the full sale plus the surcharge as revenue, and record the processor's fees as a separate expense. Netting the two against each other hides both numbers and makes the books harder to reconcile.

Your processor reports gross card volume, surcharges included, on the annual 1099-K. Booking the surcharge as income keeps your books tied to that figure so the year-end reconciliation matches. In QuickBooks or Xero, add it as its own service item mapped to an income account, shown as a separate line on the invoice, rather than as a negative expense or a discount.

Sales tax is easy to get wrong here. Several states treat the surcharge as part of the taxable sale, which means the surcharge itself can be subject to sales tax. Do not assume it is tax-free. Confirm the treatment for the client's state before you set up the item.

How this is tracked, and sources

Each state's status reflects the consensus of 2025 and 2026 processor and legal guides, cross-checked across sources, with the genuinely contested states flagged rather than smoothed over. Where a ban has been struck down by a federal court, or a price-transparency law changes the picture as in California, that nuance is called out instead of reduced to a single word. The table was last reviewed in June 2026.

This is general information, not legal or tax advice. Surcharge rules change, card-network rules update, and the right treatment can depend on your exact setup. Verify the current rule in the statute tracker and with your card processor before you start surcharging, and check sales-tax treatment with the client's state.