"Is it legal for a vendor to charge me a "credit card use" fee?"
It depends. Visa and MasterCard prohibit merchants from adding a
surcharge to credit card purchases, however, Discover and American
Express do not. If you used Visa or MasterCard and you were charged a
surcharge for using your card, contact your credit card provider and
they will credit your account the amount of the extra charge. If you
used Discover or Amex, there's not too much you can do except to call
your credit card provider to find out how much the merchant is allowed
to charge. In California it is illegal for a merchant to add on a
surcharge to credit card purchases, however, such is not the case in
Utah (only government agencies are not permitted to add a surcharge).
Question: Can merchants add a surcharge to customers' bills for using
a credit or debit card?
"Answer: In most cases, no, because a majority of cards these days are
Visa or MasterCard brands. Visa and MasterCard specifically prohibit
merchants from levying any kind of surcharge for using one of their
branded cards, credit or debit. American Express and Discover do not
However, Visa and MasterCard say that merchants may offer an
incentive, such as a discount, to customers who pay with cash."
States that have outlawed surcharges for using a credit card:
National Consumer Advocates Warn Discover Cardholders: Expect Merchant
Imposed Check Out Fees Now that Card Company Lifted Restrictions that
"States that ban surcharging or "check out fees" for consumers who pay
with plastic are: California, Colorado, Texas, Oklahoma, Connecticut,
Florida, Kansas, Maine, and New York. New Hampshire specifically bans
surcharging by travel companies and Kentucky bans surcharging by
restaurants for tips if they are included on a credit transaction.
Wyoming, Washington, Maryland and Massachusetts allow merchants to
offer a cash discount to the customer who pays with cash rather than
credit, as do many other states. Only Minnesota allows surcharging up
to five percent of the purchase price."
MasterCard Merchant Agreement
"5.2 The Merchant may not levy a surcharge on payment for goods or
services because payment is made by a card."
Additional Links of Interest
The 3 Percent Fight Organization
"For a couple of years now the 3 Percent Fight Organization has been
an offline small community based voice informing local consumers that
it was not okay for local merchants to blatantly and openly penalize
them when they paid for a purchase with a credit card..."
Discover Debit Card Challenges Visa and MasterCard
* California Codes
o California Civil Code
+ CIVIL CODE SECTION 1747-1748.7
(a) No retailer in any sales, service, or lease transaction with a
consumer may impose a surcharge on a cardholder who elects to use a
credit card in lieu of payment by cash, check, or similar means. A
retailer may, however, offer discounts for the purpose of inducing
payment by cash, check, or other means not involving the use of a
credit card, provided that the discount is offered to all prospective
(b) Any retailer who willfully violates this section by imposing a
surcharge on a cardholder who elects to use a credit card and who
fails to pay that amount to the cardholder within 30 days of a written
demand by the cardholder to the retailer by certified mail, shall be
liable to the cardholder for three times the amount at which actual
damages are assessed. The cardholder shall also be entitled to recover
reasonable attorney's fees and costs incurred in the action.
A cause of action under this section may be brought in small claims
court, if it does not exceed the jurisdiction of that court, or in any
other appropriate court."
Utah (Government Revenue)
63-38a-105. Electronic Revenue Collections.
(c) Except as provided in Subsection (8), an agency may not separately
identify a charge assessed to cover the cost of an electronic payment
as a convenience fee or a surcharge on an electronic payment.
"Prohibited Transactions. Merchant shall not do any of the following
with respect to any Transaction:
(a) Impose a surcharge on a Cardholder who elects to use a Card in
lieu of payment by cash, check or other mode of payment;"
Prohibitions. Merchant will not do any of the following:
(a) Surcharge-- require, through an increase in price or otherwise,
any Cardholder to pay a surcharge at the time of sale or to pay any
part of any charge that BUSA and/or the Bank impose on the Merchant.
Discounts for payments in cash, however, are permitted."
I hope you fall within the Visa/MasterCard category! If you have any
questions, please post a clarification request and wait for me to
respond before closing/rating my answer.
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