Card Payment Surcharging is on The Rise
The rules governing fees charged to customers when they pay with a card, known as a credit card “surcharge,” are clearly outlined in card brand policies and various state regulations. This guide explains the types of surcharges that are restricted and how to report businesses that improperly impose these fees. Before filing a complaint, it’s essential to confirm that the business is actually violating the rules.
What Card Surcharges Look Like on a Receipt
When a surcharge is properly applied, it should appear as a separate line item on your receipt, clearly labeled. For example:
- Subtotal: $100.00
- Credit Card Surcharge (3%): $3.00
- Total: $103.00
If the surcharge is not separately listed, the listed percentage exceeds the card brand’s cap (3% for Visa, 4% for Mastercard), is disguised as a vague service charge, or if it was applied to a debit card purchase, the business may be in violation of surcharge rules-both from a card brand policy and legal basis.
Penalties for Improper Surcharging
Businesses and processors that violate surcharge rules face significant penalties from multiple sources:
Card Brand Penalties
- Visa: Non-compliance fines ranging from $50,000 to $1 million, with escalating penalties for persistent violations.
- Mastercard: Acquiring banks face an immediate $1,000 fine per non-compliant merchant. Merchants themselves face fines ranging from $50,000 to $1 million. Ongoing violations can result in $5,000 to $25,000 per month.
- Discover and Amex: Enforcement actions, including merchant account suspension.
State Penalties
- New York: Up to $500 civil penalty per violation, enforced by the AG and local governments.
- California: Under SB 478, consumers can pursue private civil action for $1,000 or actual damages per violation, whichever is greater. Class action lawsuits are permitted. Government enforcement carries penalties of up to $2,500 per violation, plus restitution and attorney’s fees.
Federal Penalties
Under the FTC’s Junk Fee Rule (effective May 12, 2025) and general Section 5 authority, businesses engaging in deceptive pricing practices face civil penalties of up to $53,088 per violation (inflation-adjusted as of 2025).
Visa Credit Card Surcharge Rules
Visa permits credit card surcharges at the brand level (applied to all Visa transactions) or at the product level (applied to specific card types). Visa’s key surcharge rules include:
- Surcharges cannot exceed 3% of the transaction amount (reduced from 4% effective April 15, 2023) or the merchant’s actual cost of acceptance, whichever is lower.
- Merchants must notify their payment processor (acquirer) at least 30 days before implementing surcharges. As of April 2023, merchants no longer need to notify Visa directly.
- Surcharges must be clearly disclosed at the point of entry (storefront), at the point of sale, and as a separate line item on receipts.
- Online businesses must disclose surcharges before the customer reaches the checkout page.
- Surcharges are prohibited on debit cards and prepaid cards, even when processed as credit.
- Surcharges are prohibited in states that ban the practice: California, Connecticut, Maine, and Massachusetts.
Visa Fee Calculation
Visa’s policies require that card surcharges not exceed the actual cost to the business and must not exceed 3% of the transaction or limits set by state laws, such as Colorado’s 2% maximum. However, in practice, most payment systems do not relay the actual processing costs back to the business’s equipment, making accurate fee calculation impossible in the vast majority of surcharge fees.
As a result, many payment processors that market surcharging features to businesses set a fixed surcharge rate without informing business owners that this practice violates Visa’s rules. In some cases, these processors are complicit in non-compliance—either by failing to educate merchants about the rules or by knowingly programming their equipment to charge above the allowable rate.
How to Report Non-Compliant Surcharges to Visa
To file a complaint about a surcharge violation with Visa, you can file a complaint using Visa’s Visa Rules Complaint Form. You can also contact the customer service line on the back of your Visa card and request that they escalate the complaint to Visa’s compliance department.
Mastercard Credit Card Surcharge Rules
Mastercard’s surcharge rules are similar to Visa’s but differ in key areas:
- Surcharges cannot exceed 4% of the transaction amount or the merchant’s actual cost of card acceptance, whichever is lower.
- Merchants must notify their acquirer (payment processor) before surcharging. Mastercard is currently not requiring U.S. merchants to register their intent to surcharge directly on its website, though revised rules are expected in the second half of 2026.
- Acquirers must register surcharging merchants with Mastercard within 10 days of receiving notice from the merchant.
- Surcharges must be disclosed at the point of entry and point of sale, and appear as a separate line item on receipts.
- Surcharges are prohibited on debit cards and prepaid cards.
How to Report Non-Compliant Surcharges to Mastercard
Mastercard recommends that consumers call the customer support line of their credit card issuer to file complaints about improper card surcharges. Additionally, you can call Mastercard’s direct customer support line at (800) 627-8372 or submit a surcharge complaint online through Mastercard’s surcharge reporting form.
Discover Card Payment Surcharge Rules
Discover requires merchants to notify the network in advance of implementing surcharges and limits surcharges to the merchant’s actual cost of processing.
How to Report Non-Compliant Surcharges to Discover
Discover accepts card surcharge fee complaints via email at discoversurcharge@discover.com. You can search for “Discover Surcharge Form” to find Discover’s fillable PDF complaint form, which can be completed and submitted to the email address above.
AMEX Card Payment Surcharge Rules
American Express does not publish specific surcharge caps but requires that merchants cannot apply a surcharge to Amex transactions unless the same surcharge is applied to all other major card brands accepted by the merchant.
How to Report Non-Compliant Surcharges to American Express
As of the writing of this article, American Express does not have a specific channel for filing card surcharge complaints. Therefore, we recommend reaching out to the standard customer support line at 1-800-492-3344.
Debit Card Surcharge Policies and Laws
Businesses are prohibited from adding surcharges to debit card transactions under Visa and Mastercard rules, and this prohibition is reinforced by federal law. The restriction exists because debit card processing fees are significantly lower than those for credit cards.
Under the Durbin Amendment of the Dodd-Frank Act, most debit card transactions are capped at a 0.05% fee plus a per-transaction charge. If a business imposes a 4% processing fee on a debit card payment, the excess either becomes profit for the business or goes to the payment processor through fee arbitrage—both of which violate card brand rules and potentially federal law.
This distinction is critical: if you see a surcharge applied to a debit card transaction, the business is almost certainly in violation, and you should report it.
States Where Credit Card Surcharges Are Prohibited
As of 2026, the following states and territories have laws prohibiting credit card surcharges entirely. In these jurisdictions, any surcharge applied to a credit card transaction is illegal regardless of disclosure:
- California – Under SB 478 (effective July 1, 2024), credit card processing fees must be included in advertised prices and cannot be added as a separate line item.
- Connecticut – Explicit state law ban on credit card surcharges.
- Maine – State law prohibits credit card surcharges.
- Massachusetts – Explicit state law ban on credit card surcharges under Chapter 140D, Section 28A.
- Puerto Rico – Law 150 forbids surcharges on credit or debit card transactions. A May 2025 First Circuit ruling upheld this prohibition.
Several other states, including Florida, Oklahoma, and Texas, had surcharge bans that were struck down as unconstitutional by federal courts. See our complete guide to each state’s surcharge laws for full details, including states with restrictions such as Colorado’s 2% cap and Illinois’s 1% cap.
How to Report Illegal Card Payment Surcharges
If you believe a business is knowingly applying illegal card surcharges in violation of state laws, or that a credit card processor is facilitating illegal card surcharging practices, you can report the activity to government agencies that have the authority to investigate and take enforcement action.
File a Complaint with the Federal Trade Commission (FTC)
The Federal Trade Commission (FTC) is the top federal agency for consumer protection. To file a complaint about improper surcharging or deceptive pricing practices, visit ReportFraud.ftc.gov and click “Report Now.” You can also call the Consumer Response Center at 1-877-FTC-HELP (382-4357). FTC reports are shared with over 2,000 law enforcement partners across the country. While the FTC may not resolve your individual complaint, patterns of complaints can trigger investigations and enforcement actions. The FTC’s Junk Fee Rule, effective May 12, 2025, strengthened the agency’s ability to penalize deceptive pricing practices, with civil penalties of up to $53,088 per violation.
File a Complaint with the Consumer Financial Protection Bureau (CFPB)
The Consumer Financial Protection Bureau (CFPB) accepts complaints related to financial products and services, including improper surcharging by payment processors. To file a complaint, visit consumerfinance.gov/complaint or call (855) 411-CFPB (2372) toll-free. Support is available in over 180 languages. The CFPB will forward your complaint to the company involved, which typically must respond within 15 to 60 days.
Report to Your State Attorney General
Your state attorney general’s office is often the most effective avenue for reporting illegal surcharging, especially in states where surcharges are banned or restricted. The National Association of Attorneys General (NAAG) provides a directory to help you locate your state AG’s consumer complaint portal. You can also search for your state’s attorney general on their official website and follow instructions for reporting illegal or fraudulent business practices. Keep records showing the illegal surcharges, including receipts, photos of signage (or lack thereof), and dates of transactions. State AGs have been increasingly active in surcharge enforcement during 2025 and 2026, particularly in California, Massachusetts, Connecticut, and New York.
Write Your City, County, and State Representatives
Your representatives in government are not likely to step into your particular grievance, but informing them of illegal activity regarding card surcharging practices can help them refine the laws and regulations in future legislation. In New York, for example, local government officials including municipal consumer affairs offices and town attorneys now have enforcement authority over surcharge disclosure laws as of April 2025.
How Processors Exploit Surcharging for Hidden Revenue
A growing concern in the credit card processing industry is the way some processors use surcharging programs to generate hidden revenue at the expense of the businesses they serve. Here’s how it works: if a business’s actual processing cost for a credit card transaction is 2%, but the surcharge is set at 3%, the extra 1% often goes to the payment processor and to a residual commission paid monthly to the salesperson who helped the business establish their merchant account. This creates a strong incentive for both processors and salespeople to set surcharge rates as high as possible—often without fully disclosing the risks that inflated surcharge fees pose to the business.
Consumers can help expose this practice by checking their receipts for surcharge amounts and comparing them against the card brand maximums. Business owners should audit their surcharge programs regularly and verify that the surcharge rate matches their actual processing cost, not a higher rate set by their processor.
Conclusion
Credit card surcharge fees are becoming more common in the United States, and enforcement of surcharge rules has intensified at both the state and federal level during 2025 and 2026. Businesses that engage in the practice are required to comply with state laws and card brand policies. We always recommend resolving your grievance directly with a business before resorting to formal complaints. You can help businesses comply and lower their costs by referring them to our list of the best low-cost credit card processing companies. If all else fails, reporting non-compliance to card brands, the FTC, CFPB, or your state attorney general can help bring an end to predatory surcharging practices.