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| image: Nathana Rebouças on Unsplash |
What if I told you that Americans are now paying an average of $1200.00 per household annually [1] in hidden costs and direct surcharges related to credit card transaction fees? Would that shock you? What If I also told you that that figure has exploded in the last decade?
Say What? It Now Costs Extra to Use My Credit Card?
A week ago we took our car in for routine servicing. When we made the appointment, we were told upfront that there is now a processing fee for paying with a credit card. No problem. We were given notice, so we chose to bring a checkbook with us instead of putting this on the card. We saved ourselves 3% of the total bill by paying with a check.
A month ago, I made a purchase from a small vendor that I had used a year ago. She informed me that there was now a processing fee to use credit, but no fee on debit or cash. Again, I was notified prior to finalizing the purchase, so I had time to dig through my purse for cash.
As profit margins have shrunk, there’s been a huge increase in businesses now directly passing on the transaction fee for credit cards to the consumer via a transaction fee. In 2019 roughly 1% to 2% of businesses passed this fee on to their customers directly[2]. Today in 2026 that number has surged to 35%, per a J.D. Power survey discussed on the Payments Dive website. [3] That’s huge. In the past, it was relatively rare to hear of a business that was passing on this fee to the customer at the checkout terminal. Today, you have a 1 in 3 chance of encountering this situation.
What is Lawful and What Is Not?
As you’re likely aware, businesses who accept credit cards for payment are charged themselves to do so. For decades, retailers have rolled this transaction fee into the pricing of items throughout their stores or businesses. But now, more and more businesses are passing that charge on to the customer at the point of sale when credit cards are used for payment. You should know, however, by law retailers cannot charge a surcharge for using a debit card. In addition, retailers must notify customers of the surcharge in advance of the finalization of the purchase, and the exact dollar amount of the surcharge must be listed on the receipt. Businesses are limited in the amount they can charge the customer to the amount they pay to the credit processing service, typically 3% to 4%, or in some states capped at a specified lower amount. Businesses cannot use this fee to increase their profits.
If you do a great deal of shopping online, it pays to read the fine print at checkout. But it should be noted that the vast majority of large businesses (like Amazon, Target, Walmart) are not passing on the credit processing fee to the consumer on an individual basis. Instead, these businesses are rolling the fee into the price of their goods and services, as has been done previously. Which means that even if you pay with cash or debit at these larger retailers, you’re still paying for the credit card processing fees. You are, in essence, paying for the customer behind you in line to use their credit card,
Many of us here shop small businesses on principle, where this lawful practice is more likely to occur. So it’s good to know up front that you have a 1 in 3 chance of encountering a transaction fee so you can ensure you have an alternate payment form with you, whether that’s carrying cash or a debit card. I routinely carry cash because we always pay cash for gas (for a discount), and I shop WinCo using only cash.
Where Else Besides Stores and Small Businesses?
Autopay has become a popular way to manage recurrent bills. If you signed up for autopay for any of your utilities, it may be worthwhile to check your utility websites to see if they have adopted adding this surcharge for using a credit card. So many of us were maximizing our credit card rewards previously. We may have used our credit cards for autopay.
While we wait for congress to enact legislation that would protect consumers in this, there are things we can do to prevent paying additional transaction fees.
- First, pay attention when making online purchases or setting up autopay or subscription purchases. Look for the required information on transaction fees for using credit as opposed to debit or an e-check.
- And second, when making a purchase in person, you can ask if there’s a surcharge for using credit if you don’t see any notification. (But know, they are legally supposed to have signage in store.) Be prepared with another form of payment on your person when shopping in stores or at farmer’s markets and street fairs. As alluded to above, the merchant doesn’t benefit from these charges. So they’re just as happy to accept cash if that’s what you have with you.
Have you noticed an increase in credit card transaction fees in your area? Let me know in the comments in what types of businesses you've encountered this.
Sources:
1. Merchants Payments Coalition. (2026). *Credit and Debit Card ‘Swipe’ Fees Reach Record $198.25 Billion*. merchantspaymentscoalition.com.
2. J.D. Power 2026 U.S. Merchant Services Satisfaction Study (Released January 13, 2026).
3. The Nilson Report / Merchant Payments Coalition Historical Swipe Fee Index.
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Around here, I noticed that many businesses began adding on the fee for using a credit card during or right after the pandemic. Some have continued to do so, and some have not. One who has is our vet, for which the fee is 4%. I do try to pay cash there but sometimes haven't been good at predicting the bill and come up short (I absolutely hate dealing with checks, not just the writing but the watching for them to clear, so avoid them as much as possible.) Our utility companies now do, so I've gone to direct debit for them with the exception of our city bill (water, sewer, and trash, no options here for those) for which I pay a credit card bill because they've had so many billing issues and were hacked at one point. The fee for that one bill buys some peace of mind.
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