What is the maximum credit card surcharge allowed?

Visa caps surcharges at 3%, Mastercard at 4%. Federal law caps at 4%. State caps vary: Colorado 2%, others require actual cost. You cannot exceed your true processing cost.

What States Allow Credit Card Surcharges? 2026 Legal Map

📅 February 21, 2026 ⏱️ 9 min read

What States Allow Credit Card Surcharges? (2026 Legal Map)

Q: Which states ban credit card surcharges?

As of 2026, credit card surcharges are banned in Connecticut, Maine, Massachusetts, and California. New York and Oklahoma have complex rules that effectively restrict traditional percentage surcharges.

Q: Can I surcharge debit cards?

No. Debit card surcharging is prohibited in all states by federal law and card network rules. This includes prepaid cards.

Navigate the patchwork of state laws with our updated 2026 guide. See where surcharging is legal, where it’s banned, and the specific caps and rules you must follow.

Quick answer: Surcharging is legal in 46 states but banned in Connecticut, Maine, Massachusetts, and California (as of July 2024). Colorado caps at 2%. New York, Oklahoma, and Texas have complex restrictions. Debit cards can never be surcharged. Always check local laws—this guide is based on sources from LawPay, Corepay, Odson Finance, and Stripe.

🗺️ Surcharge Legality by State – Quick Map (2026)

Based on LawPay (Oct 2025), Corepay, Odson Finance, and Stripe.

✅ AL

✅ AK

✅ AZ

✅ AR

❌ CA*

⚠️ CO

❌ CT

✅ DE

✅ FL

✅ GA

✅ HI

✅ ID

✅ IL

✅ IN

✅ IA

✅ KS

✅ KY

✅ LA

❌ ME

⚠️ MD

❌ MA

✅ MI

⚠️ MN*

✅ MS

✅ MO

✅ MT

✅ NE

⚠️ NV

✅ NH

⚠️ NJ

✅ NM

⚠️ NY*

✅ NC

✅ ND

✅ OH

⚠️ OK*

✅ OR

✅ PA

⚠️ PR

✅ RI

✅ SC

⚠️ SD

✅ TN

⚠️ TX*

✅ UT

✅ VT

✅ VA

✅ WA

✅ WV

✅ WI

✅ WY

*CA banned July 2024; MN new pricing rule Jan 2025; NY/OK/TX have restrictions – see table below. DC allowed.

📊 Complete State-by-State Surcharge Rules (2026)

Compiled from LawPay, 3D Merchant, and Corepay.

State	Status	Max Surcharge / Special Rule	Source
Alabama	Legal	3% (Visa) / 4% (MC) or actual cost	Corepay
Alaska	Legal	3% / 4% or actual cost	Corepay
Arizona	Legal	3% / 4% or actual cost	Corepay
Arkansas	Legal	Must post notice	Odson Finance
California	Banned	Effective July 1, 2024 – classified as “junk fee”	LawPay, Corepay, Odson
Colorado	Restricted	Max 2% or actual cost (whichever lower)	Odson, Corepay, LawPay
Connecticut	Banned	$500 fine per offense	LawPay, Odson, Corepay
Delaware	Legal	3% / 4% or actual cost	Corepay
Florida	Legal	Disclosure required	LawPay, Odson
Georgia	Legal	Cannot profit; must offer fee-free method	Odson
Hawaii	Legal	General permit	Corepay
Idaho	Legal	General permit	Corepay
Illinois	Legal	Disclosure required	Odson
Indiana	Legal	General permit	Corepay
Iowa	Legal	General permit	Corepay
Kansas	Legal	Allowed as of Jan 2025; must disclose	Odson, 3D Merchant
Kentucky	Legal	Disclosure required	Odson
Louisiana	Legal	General permit	Corepay
Maine	Banned	State ban	LawPay, Odson, Corepay
Maryland	Legal	General permit	Corepay
Massachusetts	Banned	Strict enforcement	LawPay, Odson, Corepay
Michigan	Legal	Must post notice	Odson
Minnesota	Restricted	Effective Jan 2025: surcharge must be in advertised price, max 5% (but 3% practical)	Odson, Corepay
Mississippi	Legal	General permit	Corepay
Missouri	Legal	General permit	Corepay
Montana	Legal	General permit	Corepay
Nebraska	Legal	General permit	Corepay
Nevada	Restricted	Actual cost only; cannot exceed	Corepay
New Hampshire	Legal	General permit	Corepay
New Jersey	Restricted	Actual cost only	Corepay, Odson
New Mexico	Legal	General permit	Corepay
New York	Restricted	Actual cost only; flat % not allowed unless equals cost. New law Feb 2024.	LawPay, Odson, Corepay
North Carolina	Legal	General permit	Corepay
North Dakota	Legal	General permit	Corepay
Ohio	Legal	General permit	Corepay
Oklahoma	Restricted	Ban struck down but ambiguity; enforcement unlikely; follow card rules	3D Merchant, Corepay, Odson
Oregon	Legal	General permit	Corepay
Pennsylvania	Legal	General permit	Corepay
Puerto Rico	Banned	Territory ban	LawPay
Rhode Island	Legal	General permit	Corepay
South Carolina	Legal	General permit	Corepay
South Dakota	Restricted	Actual cost only	Corepay
Tennessee	Legal	General permit	Corepay
Texas	Restricted	Law prohibits but federal courts ruled against; AG opinion says enforceable – caution advised.	3D Merchant, Odson
Utah	Legal	General permit	Corepay
Vermont	Legal	General permit	Corepay
Virginia	Legal	General permit	Corepay
Washington	Legal	General permit	Corepay
West Virginia	Legal	General permit	Corepay
Wisconsin	Legal	General permit	Corepay
Wyoming	Legal	General permit	Corepay

🚫 States That Ban Credit Card Surcharges (2026)

Connecticut – Longstanding ban, $500 fine.
Maine – Prohibited, though cash discounts allowed.
Massachusetts – Strictly enforced ban.
California – Banned effective July 1, 2024 (SB 478, junk fee law).
Puerto Rico – Territory ban.

Sources: LawPay, Corepay, Odson Finance.

⚖️ States With Special Caps & Restrictions

Colorado – Max surcharge 2% or actual cost (whichever lower).
Minnesota – Starting Jan 2025, surcharge must be included in advertised price (cannot be added later).
New York – Surcharge cannot exceed actual processing cost. Flat 3% may be illegal if cost is lower.
New Jersey, Nevada, South Dakota – Actual cost only.
Oklahoma, Texas – Laws technically ban, but courts overturned; compliance advised with card rules.

💳 Card Network Rules (Apply in All States)

Per Stripe, LawPay, and 3D Merchant:

Visa: Cap 3% (or your cost, whichever lower). 30-day notice required.
Mastercard: Cap 4% (or your cost). 30-day notice required.
Amex: Must treat equally; check agreement.
Discover: Cap 3%, must follow state law.
Disclosure: Must post at entry, POS, online, and itemize on receipt.
Debit & prepaid: Never allowed.

💳 The Absolute Rule: No Surcharging Debit Cards

This is non-negotiable. Debit card surcharging is prohibited everywhere in the United States — regardless of state law. This stems from the Dodd-Frank Act and all major card network agreements. It also applies to prepaid debit cards, even those bearing a Visa or Mastercard logo.

⚠️ Important: Debit vs. Credit at the Terminal

Many customers run their debit card as a “credit” transaction at the point of sale. This does not make it a credit card — it is still a debit transaction and cannot be surcharged. If your terminal cannot reliably distinguish between debit and credit, do not implement surcharging. Surcharge-capable systems must detect and exclude debit cards automatically.

✅ How to Surcharge Compliantly (Step-by-Step)

If you’ve confirmed surcharging is legal in your state, follow these steps before you start:

Step 1: Notify Your Payment Processor & Card Networks

Visa and Mastercard both require 30 days’ written notice before you begin surcharging. Some processors like Stripe handle this automatically when you enable the feature — confirm with your processor whether they submit the notice on your behalf.

Step 2: Set Your Surcharge Rate Correctly

Know your actual processing cost and set the surcharge at or below that amount. Never exceed 3% for Visa or 4% for Mastercard. In Colorado, the cap is 2%. In “actual cost only” states (NJ, NV, SD, NY), document your exact cost and do not round up.

Step 3: Post Clear Disclosure Signage

Display a notice at the store entrance, at the register, and on your website checkout page. The notice must state the surcharge as a percentage or flat dollar amount, and make clear it applies only to credit cards.

Step 4: Update Your POS System

Ensure your terminal can identify and exclude debit cards from surcharging. The surcharge must appear as a separate, itemized line on every customer receipt.

Step 5: Apply Equally Across All Card Networks

If you surcharge Visa, you must apply the same surcharge to Mastercard, Amex, and Discover. You cannot surcharge one network and not another.

💡 Surcharge vs. Cash Discount: What Customers See

Surcharge Model — Customer pays the card fee

Service total$500.00

Credit card surcharge (3%)+$15.00

Total (card)$515.00

✓ Legal Everywhere

Cash Discount Model — Legal in all 50 states

Listed price (card)$515.00

Cash discount (3%)−$15.00

Total (cash)$500.00

Both models offset your processing cost. But the cash discount model works in banned states like California, Connecticut, Maine, and Massachusetts.

❓ Frequently Asked Questions

Which states ban credit card surcharges in 2026?

As of 2026, surcharges are banned in Connecticut, Maine, Massachusetts, and California (banned July 2024). Puerto Rico also prohibits them. New York, Oklahoma, and Texas have restrictions that make standard percentage surcharges legally risky. Consult a local attorney if you’re uncertain about your state’s enforcement posture.

What is the maximum surcharge I can charge?

The cap is whichever is lower: your actual processing cost, the card network cap (3% for Visa, 4% for Mastercard), or your state’s cap. Colorado is capped at 2%. In most states, 3% is the practical maximum. You can never profit from a surcharge — it must only offset your actual cost.

Can I surcharge debit cards?

No — never. Debit card surcharging is prohibited in all 50 states under federal law and card network rules. This includes prepaid debit cards with a Visa or Mastercard logo, and debit cards run as “credit” transactions. If your system cannot reliably identify debit cards, do not surcharge at all.

What’s the difference between a surcharge and a cash discount?

A surcharge adds a fee on top of the listed price when a customer pays by card. A cash discount sets the listed price as the card price and reduces it for cash payers. Financially identical for the merchant — but cash discounts are legal in all 50 states, including the four that ban surcharges.

Do I need to notify Visa and Mastercard before surcharging?

Yes. Both networks require 30 days’ written notice before you begin surcharging. Some processors (like Stripe) handle this automatically when you enable surcharging. Check with your processor to confirm whether they submit the notice on your behalf.

Is a credit card surcharge the same as a convenience fee?

No. A convenience fee is charged when a customer uses a non-standard payment channel (e.g., paying a utility bill online vs. in-person). A surcharge applies solely because the customer paid by credit card. Convenience fees have fewer restrictions and are commonly used for government and utility payments.

Not sure if you can surcharge in your state?

Get a free compliance review and find out if a cash discount program could save you thousands in processing fees annually.

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Sources: LawPay (Oct 2025), Corepay, Odson Finance, Stripe, 3D Merchant. Laws as of February 2026. This is not legal advice — consult an attorney for your specific situation.

Team Merchant Insider

Team Merchant Insiders is the editorial and research team behind Merchant Insiders, an independent U.S.-focused publication covering credit card processing, payment pricing, and fee optimization for small and mid-size businesses.
Our team combines hands-on experience in merchant services with deep research into processing fees, pricing models, compliance rules, and processor contracts.