Credit card surcharge laws by state come down to two questions: does your state ban it, and does a card brand cap apply. Most states allow surcharging under Visa and Mastercard rules (a 3% practical cap, no debit cards, 30 days notice). A few states restrict it, and two, California and Texas, have bans that courts struck down but the legislature never repealed.
Three things changed in 2026 alone: Louisiana banned debit surcharging, Illinois pushed its interchange law back a year, and a federal court preliminarily approved a settlement that will eventually give merchants more surcharge flexibility. We cover all three below, plus the state-by-state table and the two states (California, Texas) everyone gets wrong.
What changed in 2026
This is the part most 50-state tables skip, because they get updated once a year and 2026 has moved fast:
- Louisiana, effective August 1, 2026. Act 751 (formerly SB 254) bans surcharging debit card transactions statewide. Credit card surcharging is unaffected. A cardholder who is wrongly surcharged on a debit transaction can send written notice; the business has 30 days to refund it before facing a private lawsuit, and the state attorney general can also pursue civil penalties.
- Oklahoma, effective November 1, 2025. SB 677 repealed Oklahoma's old no-surcharge statute and replaced it with a 2% cap (or your actual processing cost, whichever is lower), on the condition that you also accept a non-card payment method.
- Illinois, delayed to July 1, 2027. The Illinois Interchange Fee Prohibition Act, which bars charging interchange fees on the tax and tip portion of a sale, was set to start July 2026. The legislature pushed it to July 1, 2027, and a federal court separately issued a permanent injunction blocking enforcement against national banks, out-of-state banks, federal savings associations, and the card networks. Only Illinois state-chartered banks and credit unions remain on the hook. This law is about interchange on tax and tip, not surcharging directly, but it is the one Illinois merchants keep asking us about.
- The Visa-Mastercard settlement, preliminary approval June 9, 2026. Judge Brian Cogan (E.D.N.Y.) granted preliminary approval to a $38 billion settlement that would cut credit interchange rates by 10 basis points for five years and give merchants new flexibility to choose which card products to surcharge or accept. None of that is final. Final approval has not happened, and the new surcharge flexibility does not take effect until final approval plus a waiting period. Do not change your surcharge program based on the settlement yet.
What this means if you surcharge today
Put plainly, here is the action list for a merchant already running a surcharge program in August 2026:
- In Louisiana, the debit ban is now in effect as of August 1, 2026. Confirm your terminal detects debit cards and skips the surcharge on them; if it does not, turn off surcharging on debit until it is fixed.
- In Oklahoma, you can now register a surcharge program, but keep it at 2% or your actual cost, whichever is lower, and make sure you still take cash, ACH, or check as an alternative.
- In Illinois, the tax and tip interchange rule is not live yet and will not be until July 2027 at the earliest, so no action is required on your statement today.
- Everywhere, the Visa-Mastercard settlement changes nothing yet. Keep surcharging (or not) exactly as you do today until final approval is granted and the waiting period passes. We will cover what actually changes once that happens.
Is credit card surcharging legal?
There is no single yes or no answer for the whole country, and any page that gives you one is oversimplifying. The real test has two parts:
- Does your state prohibit or restrict it? A handful of states ban surcharging outright, a few more cap or condition it, and two states (California, Texas) have bans that are unenforceable after losing in federal court but were never taken off the books.
- Are you following Visa and Mastercard's rules? Even where state law allows surcharging, the card networks set their own cap, notice period, and disclosure rules, and they enforce those rules regardless of what your state permits.
You need a yes on both to surcharge safely.
Credit card surcharge rules: the cap, debit cards, and disclosure
Where state law allows it, Visa and Mastercard set the rest of the rules, and they are specific. Per Visa's published merchant surcharge guidance (dated February 15, 2024) and Mastercard's published surcharge rules:
- The cap. Visa limits a surcharge to your merchant discount rate or 3%, whichever is lower. Mastercard's limit is 4% on the same lesser-of basis. Since most merchants take both brands and have to apply one consistent percentage, 3% is the practical ceiling almost everywhere. A few states cap it lower still (Colorado and Oklahoma at 2%).
- No debit or prepaid cards. Both networks bar surcharging debit and prepaid cards, full stop, in every state. This is a network rule, not a federal law (see the debit section below).
- 30 days notice. You must notify your acquirer, and for Visa, Visa itself, at least 30 days before you start surcharging.
- Disclosure at entry, at the register, and on the receipt. Customers need to see the surcharge is coming before they commit to buying, not find it buried in the total.
Break any of these and your acquirer can be fined, and that fine gets passed straight to you.
Credit card surcharge laws by state
This table covers the states with an actual restriction, cap, or added requirement that we could verify against a primary source this week. Every other state follows the general Visa and Mastercard rules above with no additional state-level layer that we found.
| State | Status | What it means |
|---|---|---|
| Connecticut, Maine, Massachusetts, Puerto Rico | Prohibited | Visa's own published guidance lists these as states where surcharging is prohibited. Do not surcharge here. |
| California | Banned on the books, held unconstitutional as applied | The state's 1985 no-surcharge law was held unconstitutional as applied by the Ninth Circuit, a restriction on commercial speech. The statute was never repealed, but California has not enforced it since the ruling. |
| Texas | Banned on the books, held unconstitutional as applied | Tex. Bus. & Com. Code 604A.002 is still on the books. A federal district court held it unconstitutional as applied in Rowell v. Paxton (2018), on remand after the Supreme Court's Expressions Hair Design ruling, and it has not been enforced since. |
| Oklahoma | Newly allowed, capped at 2% | Oklahoma repealed its old no-surcharge statute through SB 677, effective November 1, 2025. Surcharging is now allowed up to the lesser of 2% of the transaction or your actual processing cost, and only if you also accept another payment method. |
| Colorado | Allowed, capped at 2% | C.R.S. 5-2-212 caps surcharges at the lesser of 2% or your merchant discount rate, bars any surcharge on cash, check, debit, or gift cards, and requires posted signage. |
| New York | Allowed, two-price display required | N.Y. Gen. Bus. Law 518 does not ban surcharging. It requires the card price to be posted in full, with the surcharge included, so the customer never pays more than the posted number. See the New York section below. |
| Louisiana | Credit surcharging allowed, debit surcharging banned as of 8/1/2026 | Act 751 (SB 254) bans surcharging debit card transactions starting August 1, 2026. It does not touch credit card surcharging, which follows the general Visa and Mastercard rules below. |
| New Jersey, Minnesota | Allowed, with added requirements | Visa's published guidance flags both states as having surcharge requirements beyond the standard network rules. Confirm the current disclosure and notice rules with counsel before you surcharge in either state. |
| Everywhere else | Allowed under Visa and Mastercard rules | No state-specific ban or cap that we could verify as of this writing. You still have to follow the card network rules below: the percentage cap, the 30-day notice, and the disclosure requirements. |
State surcharge law changes often and gets litigated. Treat this table as a starting point, confirm your specific state with your processor or an attorney before you flip surcharging on, and recheck it if you operate in more than one state.
New York credit card surcharge law
New York does not ban surcharging, despite what older articles say. N.Y. Gen. Bus. Law 518 requires that if you surcharge, you post the full card price, surcharge included, so the number the customer sees is the number they pay. The statute caps the surcharge at whatever your card processor actually charges you, and it expressly allows two-price signage: a cash price and a card price listed side by side. Violate it and you are looking at a civil penalty of up to $500 per violation. New York's rule is a disclosure and pricing-display law, not a prohibition, and dual pricing is the cleanest way to comply with it.
Credit card surcharge laws in California and Texas
These are the two states every competitor table gets vague or wrong, because the honest answer is not a clean yes or no.
California passed its no-surcharge law in 1985. The Ninth Circuit later held the law unconstitutional as applied and permanently enjoined its enforcement, a restriction on commercial speech, against the merchants who challenged it. The legislature never repealed the statute, so it is still technically on the books. It is California's practice not to enforce it since that ruling, but the ruling itself was as applied, not a blanket repeal.
Texas is the same pattern. Tex. Bus. & Com. Code 604A.002 bars surcharging. A federal district court held it unconstitutional as applied and permanently enjoined its enforcement in Rowell v. Paxton in 2018, after the U.S. Supreme Court sent the case back for reconsideration in light of Expressions Hair Design v. Schneiderman. The statute is still on the books, and it has not been enforced since that ruling.
Neither state has flat-out “legal” or “illegal” surcharging. Both have a statute that says no and a federal court ruling, held as applied to the merchants who sued, that the statute cannot be enforced against them. Merchants in both states surcharge today because the practical enforcement risk is low, not because the law changed. Confirm current enforcement posture with counsel before you rely on it, especially if you operate in either state at scale.
What about debit cards?
This is the rule merchants blur most often, so we will say it plainly: you cannot surcharge debit or prepaid cards anywhere in the United States. That prohibition comes from Visa's and Mastercard's own operating rules, not from a federal statute. It applies the same way whether your state restricts credit card surcharging or not, and it applies no matter how the cardholder runs the card at the terminal. Louisiana's new law puts a state penalty behind the same rule starting August 1, 2026. Every other state already relies on the card networks to enforce it, and they do, with fines that land on your processor and then on you.
The compliant alternative: skip surcharging with Cash Discount
If tracking state law and card brand rules for a 3% fee sounds like more compliance work than it is worth, you are not wrong. Most of our merchants use Cash Discount pricing instead of surcharging. A cash discount takes money off the posted price for paying cash, rather than adding a fee for paying by card, and it runs on a different legal foundation (the 1981 Cash Discount Act and the Durbin Amendment's discount protection) that does not require card-brand registration or a state-by-state legal review. Discounts for paying cash have federal protection that surcharges never got, which is why they avoid the state-by-state mess above, and Cash Discount stays clean on debit cards automatically, since the discount only applies to cash and check.
If you would rather keep a transparent per-transaction rate instead of running a discount or surcharge program at all, interchange-plus pricing is the other honest option, you see exactly what you pay on every transaction with no markup games. Either way beats guessing at 50 different state surcharge rules.
See how the math works in Zero-Fee processing explained, or if you are in Florida specifically, read our Florida-specific legal guide for the state details that apply to our home market. Want a straight answer for your business instead of reading 50 state laws yourself? Get a free rate review and we will tell you which model fits.
Frequently asked questions
Is it legal to charge a credit card surcharge?
In most states, yes, as long as you follow Visa's and Mastercard's rules: notify your acquirer 30 days ahead, cap the fee at the lower of your processing cost or the card brand's ceiling, and disclose it clearly. A handful of states restrict or ban it outright, and a couple more have bans that are unenforceable after being struck down in court but never formally repealed.
Can you legally surcharge debit cards?
No. Visa and Mastercard both prohibit surcharging debit and prepaid cards everywhere in the United States, regardless of state law. This is a card network rule, not a federal statute, but it applies the same way in every state and every processor enforces it.
What is the maximum credit card surcharge you can charge?
Visa caps surcharges at the lesser of your merchant discount rate or 3%. Mastercard's cap is 4% under the same lesser-of rule. Since most merchants accept both brands and have to apply the same surcharge percentage across brands, 3% is the practical ceiling. Some states, like Colorado and Oklahoma, cap it lower at 2%.
Surcharge law changes state by state and case by case, and this guide is not legal advice. Confirm your state's current status and your card brand's requirements with your processor or an attorney before you launch a surcharge program.
Related reading: Zero-Fee processing explained · Is Zero-Fee processing legal in Florida?