Legal Guide

Credit Card Surcharge Laws by State (2026 Guide)

Updated February 2026 · 12 min read

For decades, credit card surcharging was illegal across the United States. Merchants absorbed processing fees — typically 2.5–3.5% per transaction — as a cost of doing business. That changed in 2013 after the landmark Durbin Amendment and the settlement of a class-action lawsuit against Visa and Mastercard. Today, surcharging is legal in 47 states plus Washington D.C., allowing businesses to pass credit card processing costs directly to the customer. But the rules vary by state, and getting it wrong can mean fines, lawsuits, or losing your merchant account. This guide covers everything you need to know.

Prohibited States

As of 2026, three jurisdictions explicitly prohibit credit card surcharges by law:

⛔ Connecticut

Connecticut General Statutes § 42-133ff prohibits merchants from imposing a surcharge on customers who pay by credit card. Violations can result in fines and civil liability.

⛔ Massachusetts

Massachusetts General Laws Ch. 140D § 28A(a) makes it unlawful for any seller to impose a surcharge on a buyer who elects to use a credit card. The law has been upheld in court challenges.

⛔ Puerto Rico

Puerto Rico's consumer protection laws prohibit merchants from adding surcharges to credit card transactions. This applies to all businesses operating in the territory.

Restricted States

One state allows surcharging but imposes a cap below the standard card network limits:

⚠ Colorado — Capped at 2%

Colorado allows credit card surcharging but caps the surcharge at 2% of the transaction amount, regardless of your actual processing cost. If your processor charges 3.5%, you can only pass 2% to the customer and must absorb the remaining 1.5%. The surcharge must be clearly disclosed before the transaction.

All Other States — Legal

The remaining 47 states plus Washington D.C. allow credit card surcharging, provided you comply with card network rules and disclose the fee to customers. This includes major markets like California, Texas, Florida, New York, Illinois, Pennsylvania, Ohio, Georgia, North Carolina, and all other states not listed above. Several states that previously banned surcharging — including New York, Texas, California, Florida, Kansas, Maine, and Oklahoma — have since had their bans struck down by courts or repealed by legislatures.

Visa vs Mastercard Rules

Even in states where surcharging is legal, you must follow card network rules. Visa and Mastercard each have their own requirements:

Rule	Visa	Mastercard
Maximum surcharge	3%	4%
Advance notice required	30 days written notice	Registration required
Debit card surcharge	Prohibited	Prohibited
Disclosure at point of sale	Required	Required
Disclosure on receipt	Required (separate line)	Required (separate line)
Surcharge on prepaid cards	Prohibited	Prohibited

Important: Your surcharge can never exceed your actual processing cost. If your processor charges you 2.9%, you cannot surcharge 3%. The surcharge must be the lesser of your cost or the network's cap.

How to Stay Compliant

Follow these five steps to surcharge legally and avoid penalties:

Register with card networks (30 days before starting)
Visa requires a written notification letter sent at least 30 days before you begin surcharging. Mastercard requires registration through their online portal. Your payment processor or acquirer can often submit this on your behalf.
Post signage at point of sale
Display a clear notice at your business entrance and at the point of sale (register, checkout page, or invoice) informing customers that a surcharge applies to credit card transactions. For online businesses, the disclosure must appear before the payment page.
Disclose on receipts
The surcharge amount must appear as a separate line item on every receipt and invoice. It cannot be bundled into the price or hidden within other fees. The customer must be able to see exactly how much the surcharge is.
Never exceed your actual processing cost
The surcharge must be equal to or less than the merchant discount rate (what your processor charges you). If your rate is 2.9%, your surcharge cannot be 3.5%. Keep documentation of your processing agreement as proof.
Never surcharge debit cards
This is the most commonly violated rule. Even if a debit card is run as "credit," you cannot surcharge it. Your payment system must be able to distinguish between credit and debit cards and automatically exclude debit transactions from the surcharge.

How Maple Street Handles Compliance

Maple Street automates every compliance requirement so you never have to think about it. Here's what happens automatically when you send an invoice:

State detection: We detect your customer's state and automatically disable surcharging in CT, MA, and PR
Colorado cap: Surcharges are automatically capped at 2% for Colorado customers
Debit card exclusion: Our payment system identifies debit cards in real time and removes the surcharge before the customer is charged
Transparent disclosure: Every invoice shows the surcharge as a separate line item with clear language explaining the fee
Alternative payment options: Customers always see a bank transfer option with no surcharge, giving them a fee-free alternative

Frequently Asked Questions

Is credit card surcharging legal in my state?

Surcharging is legal in 47 states plus Washington D.C. It is prohibited in Connecticut, Massachusetts, and Puerto Rico. Colorado allows surcharging but caps it at 2%. Check with your state attorney general for the latest regulations.

Can I surcharge debit cards?

No. Visa and Mastercard rules explicitly prohibit surcharging debit card transactions, even if the customer selects "credit" at the terminal. Surcharges may only be applied to credit card transactions.

Will customers get upset about the surcharge?

Most customers are already used to paying convenience fees for utilities, parking, and government services. The key is transparency: disclose the fee clearly before the transaction and offer a no-fee alternative like bank transfer. In practice, fewer than 3% of customers raise concerns.

What is the maximum surcharge I can charge?

Visa caps surcharges at 3% and Mastercard at 4%. However, you can never surcharge more than your actual processing cost. If your processing rate is 2.9%, your surcharge cannot exceed 2.9%. In Colorado, the cap is 2% regardless of your actual cost.

Do I need to register with Visa or Mastercard before surcharging?

Yes. Visa requires merchants to provide 30 days written notice before beginning to surcharge. Mastercard requires registration through their merchant portal. Your payment processor can often handle this registration on your behalf.