Credit Card Surcharge Rules 2026: US, UK, EU, Australia
Credit card surcharge rules for 2026: US state laws and Visa/Mastercard caps, UK and EU consumer bans, Australia's new ban, and surcharge vs convenience fee.
Quick answer: A credit card surcharge is an extra fee for paying by credit card. In the US it is allowed in most states, capped by Visa at 3% and Mastercard at 4% (or your cost if lower), never on debit cards, and banned in a few states. The UK and EU ban surcharges on consumer cards, and Australia banned most card surcharges from 1 October 2026.
Card fees add up, so passing them on is tempting. This guide explains surcharge laws by state and country, the card network caps, how a convenience fee differs from a surcharge, and a worked example of the maximum you could charge. It also shows how to disclose a surcharge on invoices you create with our free invoice generator. For the basics of taking cards in the first place, see how to accept credit card payments.
Important: This is general information, not legal advice. Surcharge rules change often and differ by state, country, card type and customer type. Check with your payment processor, your local regulator or a lawyer before adding any card fee.
What is a credit card surcharge?
A surcharge is a fee added to a transaction because the customer chooses to pay with a credit card. It is meant to recover some or all of your cost of card acceptance (the merchant discount rate). Related terms people mix up:
- Surcharge: a percentage added for credit card payments.
- Convenience fee: a flat fee for paying through an alternative channel, such as online or by phone, that is not your usual way of taking payment.
- Service fee: a fee used by some government and education payees under specific network programmes.
- Cash discount: a lower price for paying by cash or bank transfer, rather than a higher price for cards.
Credit card surcharge rules in the US
In the US, surcharging is governed by two layers: card network rules and state law. You have to satisfy both.
Card network rules (Visa, Mastercard and others)
- Cap: Visa limits surcharges to the lower of your cost of acceptance or 3% (since 15 April 2023). Mastercard limits them to your cost of acceptance, up to 4%. Discover and American Express have their own rules.
- Credit cards only: debit and prepaid cards cannot be surcharged, even if run as credit. Federal rules also limit debit fees.
- Notice: you must notify your acquirer or processor, typically at least 30 days before you start.
- Disclosure: customers must be told at the point of entry (store door or website) and the point of sale, and the surcharge must appear as a separate line on the receipt.
- Same treatment: generally you must surcharge all credit cards of a brand equally rather than singling out specific issuers.
See Visa's merchant rules and fees page and your processor's documentation for the current wording.
Surcharge laws by state
| State or territory | Position (check current law) |
|---|---|
| Connecticut | Surcharges on credit cards prohibited |
| Massachusetts | Surcharges on credit cards prohibited |
| Maine | Commonly listed as prohibiting card surcharges; cash discounts allowed |
| Oklahoma | Commonly listed as restricting or prohibiting surcharges |
| Puerto Rico | Surcharges prohibited |
| Colorado | Allowed, capped at 2% or your actual processing cost, whichever is lower |
| New York | Allowed, but sellers must show the total card price; surcharge cannot exceed the cost of acceptance |
| California | Allowed with clear disclosure; check current price-display rules |
| Most other states | Allowed within network caps and disclosure rules |
State rules have been challenged in court and amended several times, and summaries published by payment vendors disagree on some states. Treat this table as a starting point and confirm with your state attorney general's office or a lawyer.
Credit card surcharge rules in the UK
Since 13 January 2018, UK businesses cannot charge consumers a surcharge for paying by credit card, debit card and many other payment methods, such as some digital wallets, under the Consumer Rights (Payment Surcharges) Regulations 2012 as amended. The government announced this in its card surcharge ban notice.
- Consumers: no surcharge for paying by card.
- Business customers paying with commercial or corporate cards: a surcharge is generally allowed but must not exceed your cost of accepting that payment method.
- Enforcement: Trading Standards, and consumers can reclaim unlawful surcharges.
If you invoice consumers in the UK, build card costs into your prices instead. The UK invoice generator lets you list card and bank options without a fee line.
Credit card surcharge rules in the EU
The revised Payment Services Directive (PSD2) bans surcharges on payment cards covered by the Interchange Fee Regulation, which includes most consumer debit and credit cards issued in the EEA. Member states can go further and ban or limit surcharges on other methods. Commercial cards and cards from schemes outside the interchange caps may be surchargeable depending on national law, but any surcharge must not exceed the cost to the merchant. Check the rules of the member state where you sell.
Card surcharge rules in Australia (from 1 October 2026)
The Reserve Bank of Australia concluded its review of merchant card payment costs in March 2026. From 1 October 2026, surcharges on eftpos, Mastercard and Visa debit, prepaid and credit card payments are removed, enforced through the card networks' no-surcharge rules, and American Express said it would also remove surcharging from that date. The change targets surcharges for paying by card; it does not cover weekend, public holiday or general service fees. Before October 2026, surcharges were allowed up to the merchant's cost of acceptance. See the RBA's surcharging FAQs for details.
Card surcharge cap comparison
| Jurisdiction | Consumer credit cards | Debit cards | Cap |
|---|---|---|---|
| United States (most states) | Allowed | Not allowed | Visa 3%, Mastercard 4%, or cost if lower; Colorado 2% |
| US states with bans | Not allowed | Not allowed | Not applicable; cash discounts may be allowed |
| United Kingdom | Not allowed | Not allowed | Business cards: cost of acceptance |
| European Union | Not allowed for regulated cards | Not allowed | Other cards: cost, subject to national law |
| Australia (from 1 Oct 2026) | Not allowed (eftpos, Visa, Mastercard; Amex voluntarily) | Not allowed | Not applicable |
Worked example: the maximum surcharge on a $1,000 invoice
A US contractor invoices a customer $1,000.00. The processor's effective cost of acceptance on credit cards is 2.6%.
| Scenario | Calculation | Maximum surcharge |
|---|---|---|
| Visa credit card, most states | Lower of 2.6% cost or 3% cap: $1,000.00 x 2.6% | $26.00 |
| Mastercard credit card, most states | Lower of 2.6% cost or 4% cap: $1,000.00 x 2.6% | $26.00 |
| Visa credit card in Colorado | Lower of 2.6% cost or 2% state cap: $1,000.00 x 2% | $20.00 |
| Any debit card | Not permitted | $0.00 |
| Customer in Connecticut or Massachusetts | Prohibited | $0.00 |
A customer paying the Visa credit card in most states would see "Invoice total $1,000.00, credit card surcharge (2.6%) $26.00, total charged $1,026.00" on the receipt.
Convenience fee vs surcharge: what is the difference?
| Surcharge | Convenience fee | |
|---|---|---|
| Triggered by | Paying with a credit card | Paying through a non-standard channel |
| Amount | Usually a percentage | Usually a flat amount |
| Applies to debit cards? | No | Can, under network rules, if conditions are met |
| Main condition | Credit cards only, capped, disclosed | Must be for a genuine alternative channel, same fee regardless of card type |
Do not relabel a percentage card fee as a "convenience fee" to get around surcharge rules. Networks and regulators look at substance, not labels.
How to show a surcharge on an invoice
- State your surcharge policy in your contract or quote before work begins.
- On the invoice, list accepted payment methods and a line such as "A 2.6% surcharge applies to credit card payments. No surcharge for debit cards or bank transfer."
- Keep the invoice total itself without the surcharge, because the customer may pay by bank transfer.
- Make sure your payment link or processor applies the surcharge only to eligible credit cards and shows it before payment.
- Show the surcharge as a separate line on the receipt.
If you use a pay-now button, read how to add a payment link to an invoice. Note that card surcharges may affect how sales tax applies to the fee in some states; our guide to sales tax on invoices covers the basics.
Alternatives to surcharging
- Build card costs into your prices.
- Offer a cheaper route, such as bank transfer, and show your bank details on the invoice.
- Reward fast or cheap payment with an early payment discount.
- Negotiate your processing rate, or compare providers like Square and Stripe.
Credit card surcharge checklist and common mistakes
Common surcharge mistakes
- Surcharging debit cards.
- Charging more than your actual cost of acceptance.
- Skipping the 30-day notice to your processor.
- Applying US rules to UK, EU or Australian customers.
- Hiding the fee until the final payment screen.
- Continuing old surcharges in Australia after 1 October 2026.
Checklist before you add a card surcharge
- Customer's location and type (consumer or business) checked.
- State or national law confirmed.
- Processor notified and surcharge configured for credit cards only.
- Rate at or below your cost of acceptance and the network cap.
- Disclosure at point of entry, point of sale, on the invoice and on the receipt.
- Fee-free alternative offered.
Next step: disclose your card fees clearly
Create your invoice in the invoice generator, list your accepted payment methods and any lawful surcharge wording in the notes, and download the PDF. If you are reconsidering card payments entirely, compare costs in our guide to accepting credit card payments.
Frequently asked questions
Can I add a credit card fee to an invoice I have already sent?
You should not add a surcharge the customer did not agree to. Surcharges should be disclosed before the customer chooses to pay by card, and card network rules require disclosure at the point of entry and point of sale. State your surcharge policy in your terms and on the invoice before payment, and keep the surcharge as a separate line on the receipt.
Can I surcharge a debit card if the customer runs it as credit?
No, under Visa and Mastercard rules in the US. Debit and prepaid cards cannot be surcharged even when processed as credit. Your payment provider should be able to detect the card type and apply the surcharge only to eligible credit cards. If it cannot, you risk breaking the rules on every debit transaction.
Can I surcharge business customers in the UK?
The UK ban applies to consumer payments. For payments by business or corporate cards, surcharges are generally allowed but must not exceed the cost to you of accepting that payment method. Check your acquirer agreement and keep evidence of your costs if you surcharge commercial cards.
Is a cash discount the same as a surcharge?
Not legally. A cash discount program lists the card price and gives a discount for paying by cash or bank transfer, while a surcharge adds a fee on top of the listed price for card payment. Some states that ban surcharges allow cash discounts, but the presentation must be genuine and clearly disclosed.
What happens if I surcharge illegally?
Consequences vary. In the US, state attorneys general can bring enforcement actions and card networks can fine merchants through their acquirer. In the UK, Trading Standards can enforce and consumers can reclaim unlawful surcharges. In Australia, card networks can enforce their no-surcharge rules from October 2026. Refunding customers is usually the first remedy.
Can I charge a fee for paying by PayPal or bank transfer?
In the UK, the consumer surcharge ban also covers many other payment methods, including some digital wallets. In the EU, rules vary by member state. In the US, fees on non-card methods are mainly governed by state consumer law and your contract. Check the rules for each method and disclose any fee before the customer pays.
Do I charge sales tax on a credit card surcharge?
In many US states, yes, if the underlying sale is taxable. States often treat a surcharge as part of the sale price, so sales tax is calculated on the total including the surcharge, and if the sale is exempt the surcharge usually is too. Rules differ by state, so check your state revenue department's guidance and make sure your payment system calculates tax on the right amount.
Can I surcharge American Express cards?
Generally yes in the US, but under American Express's own merchant rules rather than Visa's or Mastercard's. Amex expects the surcharge to be clearly disclosed and not to exceed what you charge on other credit cards. State law still applies, and Amex said it would remove surcharging in Australia from 1 October 2026. Check the current Amex merchant regulations and your processor's settings before you start.
Can businesses surcharge credit cards in Canada?
Yes, in most provinces. Since October 2022, Visa and Mastercard rules have allowed Canadian merchants to surcharge credit cards up to 2.4% or their cost of acceptance, whichever is lower, after giving their processor notice and with clear disclosure. Quebec prohibits surcharges under its consumer protection law, and debit and prepaid cards can't be surcharged. Check current network rules and provincial law before adding a fee.
Can I set a minimum amount for credit card payments instead?
In the US, yes. Federal law lets merchants require a minimum purchase of up to $10 for credit cards, as long as it applies equally to all card networks and issuers. You can't set a minimum for debit cards. A minimum can be simpler than a surcharge for small counter sales, though it rarely matters on invoices, which are usually larger. Rules outside the US differ, so check local law.
Invoice Creator Editorial Team
Guides on invoicing, cash flow and small-business finance from Invoice Creator, operated by Next Software Development Company. Content is reviewed for accuracy against the fields our own invoice generator produces.
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