Credit card surcharging — charging customers a fee when they pay by credit card — can eliminate your processing costs entirely. But it's one of the most compliance-heavy strategies in payment processing. State laws vary, card network rules apply, and getting it wrong can result in fines or customer complaints.
This guide covers what you need to know: federal rules, card network requirements, state-by-state restrictions, and how to implement surcharging correctly.
What surcharging is and how it works
A credit card surcharge is a fee added to the transaction total when a customer chooses to pay by credit card. The fee offsets the merchant's processing cost — typically 1.5-3.5% depending on the card type.
Surcharges apply only to credit cards. Debit cards, prepaid cards, and cash transactions cannot be surcharged under card network rules.
Federal rules and card network requirements
State-by-state breakdown
| State | Status | Notes |
|---|---|---|
| Connecticut | Prohibited | State law prohibits surcharging |
| Maine | Prohibited | State law prohibits surcharging |
| Massachusetts | Prohibited | State law prohibits surcharging |
| California | Permitted | Allowed with proper disclosure |
| Texas | Permitted | Allowed with proper disclosure |
| Florida | Permitted | Allowed with proper disclosure |
| New York | Permitted | Allowed; dual pricing preferred |
| All other states | Permitted | Generally permitted; check with Clearo for your specific state |
How to set up surcharging compliantly
Confirm your state allows it
Verify your state permits surcharging. Connecticut, Maine, and Massachusetts currently prohibit it.
Notify the card networks
Submit notice to Visa and Mastercard at least 30 days in advance. Clearo handles this for you.
Post required signage
Signage must appear at the entrance and at the point of sale. We provide compliant signage templates.
Configure your terminals
Terminals must automatically identify credit vs. debit and apply the surcharge only to credit transactions. Clearo handles this configuration.
Update your receipts
The surcharge must appear as a separate, labeled line item on all receipts. Automatic with proper terminal setup.
Common mistakes that trigger problems
Surcharging vs. dual pricing vs. cash discount
Surcharging adds a fee to credit card transactions. Dual pricing displays two prices (cash and card) and lets the customer choose. Cash discounting offers a discount to cash customers (which is legally a different structure than surcharging).
All three can achieve similar outcomes. The right choice depends on your state, customer base, and how you want to communicate pricing. Clearo will recommend the right approach for your specific situation.
Not sure if surcharging works in your state?
Book a call and we'll tell you upfront whether surcharging is available in your market — and if not, what alternatives might work.
Learn About Our Surcharging Program