Can They Charge a Use Fee When Paying by a Credit Card?
By: Mike on Feb 11, 2012 11:32:23 PM

Can They Charge a Use Fee When Paying by a Credit Card?

A surcharge or checkout fee for using a credit card is usually illegal, but that doesn't mean merchants don't do it anyway. Passing along surcharge fees to consumers is expressly illegal in 10 states and many credit card companies have policies forbidding the practice. A consumer must remain vigilant when paying with a credit card to ensure a merchant or vendor doesn't assess any unfair charges.

Credit Card Policies

Some major credit card companies, including Visa and MasterCard, usually have clauses in vendor agreements that prohibit businesses from charging convenience or usage fees to customers using credit cards. Credit card companies don't actively enforce these policies, so ensuring businesses adhere to these regulations is up to each consumer. Some credit card companies do allow businesses to offer discounts to consumers paying with cash or a proprietary card. Other credit card companies, including Discover, allow merchants to charge usage fees to customers provided that the fee charged to consumers does not exceed the fee assessed by Discover and that this surcharge applies to all cards. This, of course, creates a conflict with other existing vendor agreements.

State Credit Laws

As of May 2011, 10 states across the country, including California, Colorado, Florida, Massachusetts and New York, outlaw credit card surcharges at the point of sale. No vendor or merchant in these states may assess a consumer a fee for simply choosing to use a credit card. This includes merchant-imposed spending minimums and requiring customers to pay gratuities to merchant employees in cash. Customers of merchants who charge usage fees in any of the 10 states may report the merchants to the appropriate state's attorney general's office.

Debit Cards 

A consumer using her debit card as a credit card falls under the same protections against usage fees as a consumer using an actual credit card. A consumer's bank may actually charge a usage fee for swiping the card as a debit transaction as opposed to a credit card transaction. The fee can cost as much as 50 cents per transaction. The intention of the fee is to offset the cost of the speed of a debit transaction, since the bank must immediately move funds from the customer's account to the vendor's payment processor.

Spotting Extra Fees

A vendor or merchant may post a sign near the checkout declaring a usage or checkout fee for using a credit card to complete a transaction. A business may also hide the fee in the lines of a receipt and make no mention of the charge at all. It's the consumer's duty to review his receipt and refuse to pay the fee. Remember that most credit card companies forbid passing any surcharge along to the customer. Threatening to report the vendor directly to credit card companies should be enough to get the fee removed from a bill.


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Michael Mordechai YadegariReviewsout of 83 reviews