Yes. U.S. merchants that surcharge must disclose the surcharge dollar amount on every receipt.
Businesses should clearly and conspicuously notify customers of any credit card surcharges both at the point of entry and at the point of sale.
Notify Your Clients
You may accomplish this by including the credit card surcharge on your invoice or displaying a sign at your office. If you're using an online payment solution, this notice should be automatically included on your payment page.
The answer is: yes, if your business operates in states where it is legal to do so. As of the time of publishing this, the practice of imposing additional fees on credit card transactions (i.e., credit card surcharges) is prohibited in only three U.S. locations: Connecticut, Massachusetts, and Puerto Rico.
Q: Are there any states where credit card surcharging is prohibited? Yes, as of the latest updates, credit card surcharging is prohibited in Massachusetts, Connecticut, and Puerto Rico. Merchants must stay informed of changing laws to ensure compliance.
Merchants can impose a surcharge as long as it doesn't exceed the cost of the merchant's processing fee. Merchants may offer discounts for payment by cash, check or other methods unrelated to credit cards. There is no prohibition for credit card surcharges and no statute on discounts for different payment methods.
Consumer Financial Protection Bureau Releases Final Rule on Credit Card Late Fees, with Overdraft Fees on Deck. On March 5, 2024, the Consumer Financial Protection Bureau (Bureau) announced the final rule governing late fees for consumer credit card payments, likely cutting the average fee from $32 to just $8.
To report merchants charging excessive payment card surcharges, or surcharging debit and prepaid card transactions, consumers may visit www.visa.com or www.mastercard.com to fill out a Merchant Violation Form. Can cardholders be surcharged on both credit and debit card transactions? No.
Most credit card companies require merchants to disclose credit card surcharges in online transactions, on a sign at the store's point of entry and point of sale, and on the receipt.
A surcharge is not a convenience fee. A convenience fee is levied by a merchant for offering customers the privilege of paying with an alternative non-standard payment method. Merchants can process convenience fees in all 50 states. A surcharge is levied by a merchant for customer purchases made with a credit card.
If a business charges a payment surcharge, it must be able to prove the costs it is based on. If there is no way for a consumer to pay without paying a surcharge, the business must include the surcharge in the displayed price.
The No-Surcharge Rule (NSR). The NSR means that a merchant charges at most the same amount for a payment card1 transaction as for cash. If the merchant decides to apply a discount for payments in cash that discount cannot be extended to any specific card brand.
Fair Credit and Charge Card Disclosure Act.
Use cash where you can
The easiest way to avoid card surcharges is to pay by cash. While businesses can charge a surcharge for paying by debit or credit cards, they can't charge a surcharge for paying by cash.
There are a few ways of legally passing on credit card fees to customers. Some are direct, and some are indirect. Adding a surcharge to cover the credit card fee is the more direct method while incentivizing cash payments is indirect.
To avoid a credit card surcharge, you can pay with alternative methods such as cash, debit cards, or mobile payment apps. Some businesses also offer discounts for non-credit card payments, providing an incentive to choose other payment options that help avoid credit card surcharge.
Credit card surcharges are generally permissible in the United States. These surcharges are added to credit card transactions to cover processing fees. The surcharge amount is typically a percentage of the transaction. Businesses must inform customers about the surcharge before the transaction.
Q: Where are credit card surcharging and convenience fees illegal? As of January 2023, only two states and one jurisdiction still outlaw the use of credit card surcharges. They are a result of non-qualified transactions of different communications methods.: Connecticut, Massachusetts, and Puerto Rico.
7-year credit rule and your credit score
Under the Fair Credit Reporting Act, in most cases, debts can only appear on your credit report for seven years. After that period is up, the debt can no longer be reported. Also, if you've had a delinquent account on your credit report, creditors can hold the debt against you.
What is the 5/24 rule? Many card issuers have criteria for who can qualify for new accounts, but Chase is perhaps the most strict. Chase's 5/24 rule means that you can't be approved for most Chase cards if you've opened five or more personal credit cards (from any card issuer) within the past 24 months.
Whether accepting payments online or in person, banners, posters, and other appropriate types of signage should inform customers that an extra fee, such as a surcharge, will be added (as a separate line item) to the final dollar amount of their credit card purchases.
With Square's automatic card surcharge beta, you can pass on processing fees associated with card payments.
A surcharge adds an additional fee, tax, or cost to the transaction when customers pay with a card. You can add fees of up to 3% for Visa and 4% of the transaction for Mastercard. Surcharging is not legal in Connecticut, Oklahoma, Massachusetts, and Maine, and some states cap surcharge fees, like Colorado at 2%.