Credit card surcharging in 2026.

Surcharging is the practice of adding a fee — typically 2–3% — when a customer chooses to pay by credit card, to offset the merchant's cost of accepting that card. It is legal in most of the United States as of mid-2026, and it has spread fast: about 34% of US small businesses now surcharge, per J.D. Power's 2025 U.S. Merchant Services Satisfaction Study. This report explains why that happened, what it costs — for merchants and for the customer relationship — and what the numbers say about where it goes next.

How common is surcharging now?

A decade ago, surcharging was a niche practice hemmed in by state bans and clunky terminals. Today it is close to mainstream. The headline figure — roughly one in three (34%) US small businesses adds a credit card surcharge — comes from J.D. Power's January 2025 study, which framed the rise as point-of-sale payment methods proliferate and merchants look for ways to blunt rising acceptance costs.

Two structural forces removed the friction that had kept adoption low. First, a 2018 federal court ruling struck down several state surcharge bans on First Amendment grounds, and states that once prohibited the practice began converting bans into regulated permission — Oklahoma being the most recent, flipping from a ban to a capped, disclosed allowance effective November 2025. Second, modern smart terminals and gateways now detect card type and apply a compliant surcharge automatically, so a merchant no longer has to police the debit-versus-credit distinction by hand. The result is that the practical and legal barriers that suppressed surcharging for years have largely fallen — leaving cost as the main thing pushing merchants toward it, and customer sentiment as the main thing pulling them back.

The merchant economics: why they do it

Surcharging is, at its core, a response to a number that keeps getting bigger. US merchants paid a record $187.2 billion in credit and debit card swipe fees in 2024, per the Merchants Payments Coalition — with roughly $111.2 billion of that coming from Visa and Mastercard credit interchange alone, per the Nilson Report. For a small business, card acceptance is often the largest operating cost after labor and rent, and there is no realistic way to opt out: the Federal Reserve's 2025 triennial study found cards now carry 79% of US noncash payments by count. More context on those figures lives in our credit card processing statistics roundup.

The appeal of a surcharge is that it targets the cost precisely. Instead of baking a couple of percent into every price — which taxes cash and debit customers too — the merchant charges the fee only when a customer chooses the expensive rail. On a $100 credit sale, a 3% surcharge recovers $3; against an effective acceptance cost of, say, 2.4%, that roughly covers the fee and, done to the network's rules, no more.

But the surcharge is only ever the lesser of the merchant's actual cost of acceptance or the network cap. That makes one number decisive: your true, all-in effective rate (total fees ÷ total card volume). A merchant who assumes they pay 3% but is actually at 2.1% cannot lawfully surcharge 3% — and, just as important, may be paying a padded markup that a surcharge would merely pass along to customers rather than fix. This is why the highest-leverage move is often not to surcharge at all, but to first cut the underlying cost: moving to interchange-plus pricing, appending Level 2/3 data on commercial cards, and following the rest of the playbook in how to lower your processing fees. Run your own number first with the free effective rate calculator.

What customers think

This is the part vendors selling surcharge programs tend to skip, and it is the most important data in this report. Passing the fee to customers works — but the customer notices, and the effect is measurable.

• 69% have already paid one — and 57% think it should be illegal. A 2023 LendingTree survey found 69% of cardholders have been charged a credit card fee, and 57% believe charging consumers processing fees should be illegal. Surcharging is now common enough that most customers have hit one — and a majority resent it.
• Satisfaction drops 39 points when a surcharge appears. J.D. Power's 2025 data, reported by American Banker, shows customers who were surcharged score their overall satisfaction 39 points lower on a 1,000-point scale.
• 73% say they'd use their card less. In the same research, roughly three-quarters of customers said a surcharge would make them use their credit card less at that business — a real behavioral cost, not just a survey grumble.

None of this means surcharging is a mistake. It means it is a trade: a merchant recovers a hard cost and accepts a soft one — some erosion of goodwill and, at the margin, changed customer behavior. Whether the trade is worth it depends on the business, the clientele, and — as the next section shows — the framing.

The 2026 legal and network landscape

Two rulebooks govern surcharging, and both moved in 2025–2026. The first is the card networks, which set a floor for every US merchant regardless of state. The second is state law, which can only tighten that floor.

On the network side, Visa caps surcharges at 3% (lowered from 4% in April 2023) and Mastercard at 4%; because nearly every merchant accepts both, 3% is the practical national ceiling. The rules are strict on three points: the surcharge may never exceed your actual cost of acceptance, debit and prepaid cards can never be surcharged (a line rooted in the federal Durbin Amendment), and the fee must be disclosed at entry, at checkout, and as a separate line on the receipt. The merchant's right to surcharge at all traces back to the 2013 Visa/Mastercard antitrust settlement; the long-running interchange litigation and its proposed settlements continue to evolve — we track the current status and terms in the 2026 interchange changes guide.

On the state side, the trend is a shift away from outright bans and toward caps and disclosure rules. As of mid-2026, three states — Connecticut, Massachusetts, and Maine — still ban credit card surcharging (all three still allow cash discounts). Several others cap the fee below the network limit or require it not exceed the merchant's actual cost, and states like New York now legislate exactly how the price must be displayed, with penalties per sale. Illinois is a wildcard: its Interchange Fee Prohibition Act — which targets interchange on the tax and tip portion of a sale rather than what merchants may charge customers — was partially upheld in 2026 and postponed to July 2027, and copycats are likely if it survives. The full, current rule for every state is maintained in our credit card surcharge rules by state tracker.

Surcharging vs the alternatives

Surcharging is one of three fee-shifting models, and they are constantly confused — which matters, because they are treated differently under the law and land differently with customers:

• Surcharge — adds a fee on top of the posted price when the customer pays by credit card. It's what every law above regulates, and it's the framing customers react to most negatively.
• Cash discount — reduces the posted price for cash payers. Lawful in all 50 states, including the ban states, and federally protected.
• Dual pricing — displays both a cash price and a card price up front, so the customer chooses with full information. Done honestly, it satisfies even the strict display states and tends to feel fairer to customers.

The trap is the mislabeled program: if the register adds a "non-cash adjustment" to the shelf price, that's a surcharge no matter what the vendor calls it. The full comparison — the math on a $100 sale, the state legality, and how to choose — is in dual pricing vs cash discount vs surcharging.

What's next

The honest answer is that the direction is still up, but the rate of increase is likely to cool. Here is the case on each side, kept deliberately hedged because the underlying data supports a range, not a point forecast.

• Tailwinds. Swipe fees keep setting records, states keep converting bans into regulated permission, and terminal software has made compliant surcharging near-automatic. As long as acceptance costs rise faster than merchant margins, the incentive to pass them on grows.
• Headwinds. The documented customer backlash (57% want it banned; a 39-point satisfaction hit), tightening state disclosure and "junk fee" rules, and interchange-reform efforts like the Illinois act all push the other way — and any relief on interchange itself would blunt the reason to surcharge at all.
• The likely shape. Expect continued growth, concentrated in card-present retail and services, but with the framing migrating from bolt-on "surcharge" toward dual pricing and cash-discount presentation — the same economics, packaged in the version customers tolerate better.

For a merchant weighing it today, the takeaway is unchanged by any forecast: know your true cost of acceptance before you decide, because you're required to know it to surcharge compliantly anyway — and because fixing an inflated rate often recovers most of what a surcharge would, without charging your customers a cent.

Methodology & sources

Every statistic in this report is stated with the year it describes and linked to a primary or near-primary source: J.D. Power's U.S. Merchant Services Satisfaction Study (surcharge adoption and satisfaction impact, via BusinessWire and American Banker), LendingTree's 2023 consumer survey (cardholder sentiment), the Merchants Payments Coalition and Nilson Report (swipe fees and interchange), the Federal Reserve Payments Study (card share of payments), and the Visa and Mastercard operating rules plus state statutes (caps, bans, and disclosure). The one worked example — a 3% surcharge against a 2.4% effective rate on a $100 sale — is a Lifted Payments illustration, not a survey statistic. Legal detail is summarized here and maintained in full on our state-by-state tracker; surcharge law changes quickly, so confirm current rules with your acquirer or counsel before implementing a program. This report was last updated July 23, 2026. You're welcome to cite any figure here — please credit the linked primary source.