In the United States, surcharges are prohibited on debit card and prepaid card transactions by major card networks (Visa, Mastercard) and federal regulations like the Durbin Amendment, even if the card is processed as "credit". Surcharging is generally only permitted on credit card purchases.
Debit card surcharging isn't just discouraged; both federal law and the rules of all major payment networks explicitly forbid it.
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 payment methods that should not incur any surcharges, such as when inserting or swiping your debit or Eftpos card. This is because there is no additional cost to the seller for using these payment methods.
Unlike other forms of surcharging that are universally applied, credit card surcharges can be avoided by the cardholder by simply choosing a lower cost payment method such as a debit card, ACH, eCheck, and cash transactions.
Eleven states—California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas—and Puerto Rico have laws that prohibit merchants from charging consumers with surcharges on credit card transactions.
To avoid extra fees at ATM:
There may be fees for using your debit card. Examples: Some banks charge a fee if you enter a PIN (Personal Identification Number) to conduct a transaction instead of signing your name.
Cons of debit cards
Get a Chime Visa ® Debit Card online.
A surcharge is an extra fee that you can pass on to customers to recover the cost of accepting card payments. The surcharge applies to payments made by credit or debit cards. You can't charge a customer more than it costs you to process the transaction.
State-by-State Legality
As of June 2025 surcharges are prohibited or restricted in the following: California. Connecticut. Maine.
The short answer is no, it's not legal to surcharge debit card transactions. Debit card surcharge refers to adding an extra fee to a customer's bill when they opt to pay with a debit card. The idea is like credit card surcharges (shifting the cost of the processing fees to the customer).
Credit card processing fees for payments made in person are typically between 0.7% and 3.4% of the total transaction amount and 0.4% – 1.7% for debit cards. Transaction fees for online or phone payments will be slightly higher due to the increased risk of fraud.
How to avoid it. You can avoid account inactivity fees by making small monthly purchases with your debit card. Setting up a direct deposit or transfer can also help you avoid the fee.
Convenience fees are designed to cover the costs associated with offering credit card payments as an option. Surcharges aim to offset the costs of processing credit card transaction fees from credit card companies: Visa, Mastercard, Discover, American Express, etc.
Annual Maintenance Charge (AMC) is a yearly fee imposed by banks on debit cards as an ATM service fee. What is the AMC for an SBI debit card? For classic debit cards, an AMC of Rs. 125 + 18% of GST (22.50) = 147.50 is levied by SBI.
The 2/3/4 rule is a guideline, primarily used by Bank of America, that limits how many new credit cards you can get: no more than 2 in 30 days, 3 in 12 months, and 4 in 24 months, helping to prevent over-application and manage hard inquiries on your credit report. While not universal, it's a useful benchmark for responsible card application, though other banks have different rules (like Chase's 5/24 rule).
Debit card transactions cost an average of 34 cents (or 0.73% of the transaction total) in interchange fees, according to the Federal Reserve. Interchange fees, which go to the card-issuing bank, usually make up the bulk of the processing cost.