Surcharge or No Charge? Your State-by-State Cheat Sheet

Disclaimer: This post is for general informational purposes only and does not constitute legal advice. Surcharge laws vary by state and change over time. Always confirm the current rules with an attorney licensed in your state before implementing a surcharge policy.

Let’s talk about something that comes up constantly with the people that I work with: can you actually pass that credit card processing fee on to your client? 

Short answer: sometimes. Long answer: it depends entirely on which state you (or your client) are in, and the rules are a genuine patchwork. Let’s take a closer look.

First, What Are We Even Talking About? 

A credit card surcharge is a fee you add when a client pays by credit card, meant to offset the 2-4% processing cost you’re otherwise eating. It’s different from a convenience fee (charged for using a non-standard payment method, like a phone or online payment) and different from a cash discount (where your sticker price already includes the card cost, and cash-paying clients get a discount off of that price). 

A few rules apply almost everywhere surcharging is legal: the fee can’t exceed your actual processing cost or the card network cap, it can never be applied to debit or prepaid cards, and it has to be disclosed clearly before checkout and itemized on the receipt or invoice. 

Now, the state-by-state piece. 

Banned Outright (With A Workaround)

Connecticut and New York: Adding a credit card processing fee is not allowed. Full stop. BUT you can offer a percentage discount if someone pays with cash. The reason is pricing transparency, and these states want consumers to know the highest price they’ll have to pay for something up front. And if a consumer chooses a different payment method, they can receive a discount on that stated price.

Allowed (With Conditions) 

California: Legal, so long as you offer your clients and customers a realistic alternative method of payment that won’t incur a surcharge. In other words, any fee that is mandatory must be included in the total price stated.

Georgia: You can charge a convenience fee on credit card payments, but only if you also accept an alternative payment method, and the fee still can't exceed your actual processing cost. The fee also must be disclosed conspicuously in advance.

Florida: While there is a Florida law prohibiting surcharges on credit card payments, federal courts have said that law is unconstitutional. The result? Florida businesses can add a surcharge for credit card payments as long as it’s disclosed in advance and the percentage is not more than the business is being charged for the credit card purchase.

Illinois: Allows surcharging with standard disclosure requirements — clear notice before the transaction and the fee itemized on the receipt or invoice.

Maryland: Legal, and notably Maryland doesn't have a dedicated surcharge statute. You're working under card network rules and general consumer protection law rather than a specific cap-and-disclosure framework.

New Jersey: Legal, but the surcharge cost can’t exceed your actual processing cost and also has to be disclosed up front. 

The Gray Zone

Here's where it gets interesting. Texas technically has a law on the books banning credit card surcharges, but a federal court has ruled that ban to be unconstitutional. 

Here’s what that means in practice: surcharging is happening in Texas, often with disclosure, but the legal footing is still unsettled. The statute hasn’t been formally repealed, enforcement guidance varies, and a future ruling could shift things again. If you're billing clients in Texas and want to surcharge, proceed thoughtfully. Loop in your payment processor and, ideally, get a quick read from an attorney in your state before you build it into your standard billing practice.

So What Should You Actually Do?

If you serve clients across multiple states (which, let's be honest, most of you do), the safest move isn't to pick one policy and apply it everywhere. It's to check the rules for wherever your client is sitting before you add that fee. And when in doubt, default to the more conservative option: skip the surcharge, or offer a cash discount instead, which is legal nationwide and sidesteps this whole mess.

This is exactly the kind of thing that feels small until it isn't — a misapplied surcharge can turn into a consumer protection complaint fast. If you're not sure whether your billing setup is compliant, that's a great reason to reach out and have someone (translation: me) actually look at it with you.

Disclaimer: This post is for general informational purposes only and does not constitute legal advice. Laws on credit card surcharging vary by state and are subject to change. Before adopting or changing a surcharge policy, confirm the current requirements with an attorney licensed in your state.