Is Credit Card Surcharging Legal in California? (2026)
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Status: Generally allowed
A federal court ruled that California's surcharge ban is unconstitutional. Surcharging is generally allowed in practice, but you should verify with counsel before implementing.
The nationwide rules that always apply
Regardless of where you operate, the card networks set their own rules that apply in every state:
- Debit and prepaid cards can never be surcharged. This is federal law under the Durbin Amendment. You can only surcharge credit cards.
- Visa caps surcharges at 3% of the transaction amount.
- Mastercard caps surcharges at 4%, but since most merchants accept both, the effective cap is 3%.
- Never charge more than your actual cost. Your surcharge can't exceed what you pay to process the card.
- Give 30 days notice to Visa and Mastercard before you start surcharging.
- Disclose the surcharge with an entrance sign, a point-of-sale notice, and a line item on the receipt showing the surcharge amount.
Don't forget: debit is off-limits
Even in states where surcharging is fully legal, you cannot add a surcharge to debit or prepaid card transactions. Your system must detect the card type and only apply the surcharge to credit cards. Most modern terminals handle this automatically, but it's worth verifying with your processor.
The 12 junk fee lines to look for
The checklist we use when we read a merchant statement — what each line is, and which ones come off for free. Shown on this page as soon as you submit. No document to download.