Is 2% charge on credit card legal?

Asked by: Prof. Precious Heathcote MD  |  Last update: May 17, 2025
Score: 4.5/5 (59 votes)

If you're wondering if credit card surcharges are legal in your state, the answer is probably yes. The only states that currently prohibit surcharges are Connecticut, Massachusetts, Maine and Oklahoma. A recent ruling limits merchants in Colorado to a maximum surcharge of 2%.

Why 2% charge on card payment?

How do POS Machine Charges Work? When you swipe your card on a POS machine, the merchant has to pay a small percentage (about 2%) as rental fees to the bank for using the POS machine.

Is it legal to charge a percent to use a credit card?

Is it Legal to Surcharge Credit Card Transactions in California? Effective July 1, 2024, it's illegal to surcharge credit card transactions in California.

In what states is it illegal to surcharge?

Surcharging is widely accepted in the US except in Maine, Massachusetts, Connecticut, and Puerto Rico. Illinois, Colorado, Georgia, Kansas, Texas, Nevada, New York, South Dakota, New Jersey, Minnesota, California, Florida, Oklahoma, Michigan, and Montana allow surcharging with certain contingencies.

What is a 2 percent charge?

Merchants charge it to customers when they don't have significant number of card transactions/profit to cover that additional 2%. So, while it has become a norm to pay by cards, it's a burden for small merchants and that's why they transfer this to customers.

Are credit card 'swipe fees' legal?

40 related questions found

What is a 2% fee?

The 2 and 20 fee structure helps hedge funds finance their operations. The 2% flat rate charged on total assets under management (AUM) is used to pay staff salaries, administrative and office expenses, and other operational expenses.

How long does 1% of charge last?

On average, when an iPhone reaches 1% battery, it can last anywhere from a few minutes to half an hour. However, it's important to note that this estimate is approximate and can vary based on factors like screen brightness, app usage, network connectivity, and more.

Can I pass on credit card fees to customers?

There is no prohibition for credit card surcharges and no statute on discounts for different payment methods. 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.

What happens if you don't pay a surcharge?

The court issues a judgment, which allows the state to collect unpaid surcharges through involuntary means. The judgment amount (surcharge debt) must be paid before personal property can be transferred or sold. Judgments include a collection cost and interest charges calculated on the judgment balance.

How to avoid card surcharge?

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. BCU Bank customers have fee-free access to hundreds of ATMs across Australia through the atmx network.

What are the new credit card laws for 2024?

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.

How do I notify customers of credit card surcharges?

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.

What percentage can you use on a credit card?

To maintain a healthy credit score, it's important to keep your credit utilization rate (CUR) low. The general rule of thumb has been that you don't want your CUR to exceed 30%, but increasingly financial experts are recommending that you don't want to go above 10% if you really want an excellent credit score.

Are merchants allowed to charge more for a credit card?

Yes. U.S. merchants may assess a surcharge on credit card purchases that does not exceed the merchant discount rate for the applicable credit card surcharged*.

Why do I have 2 interest charges on my credit card?

Some cards have multiple interest rates, such as one for purchases and another for cash advances.

How to avoid MDR charges?

As per the scheme, Merchants need not pay the MDR charges to banks on digital payments up to Rs 2000 through Debit cards, Unified Payment Interface (UPI) and BHIM Aadhaar Pay, as the Government is reimbursing the relevant MDR charges to the banks.

What is the no surcharge rule?

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.

Can I refuse to pay service charge in a restaurant?

Tips are optional to pay, whereas service charges are mandatory to pay in California restaurants.

What is the 2 percent charge on a credit card?

The cost of swipe charges

Credit Card swipe charges can vary but typically amount to around 2% of the transaction value for physical card transactions and 2.3-2.5% for online transactions.

Is it illegal to make customers pay credit card fees?

In 1985, California passed a law (Civil Code section 1748.1) that prohibited merchants from adding a surcharge (an extra fee) when customers pay by credit card instead of cash.

What is the difference between a surcharge and a convenience fee?

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.

How long does 10% charge last?

Looking just at display for time and notifications occasionally, 10% can last a long time. Playing an graphically, data and GPS intensive AR game, 10% can be spent in 20 minutes. And of course, if the phone network is weak at your location, that will increase battery consumption as well.

Why does it take so long to charge to 100%?

If you start out with an empty battery, you'll notice it charges fairly quickly up to 90%, then slows down dramatically. Getting to 100% seems to take forever. This is because most battery circuits are designed for trickle charging. This means the last 10% charges slowly over a period of time.

What is 1% battery drain in 5 minutes?

1% every 5 minutes means an autonomy of about 8 hours. Which is normal in case of heavy use.