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Can you add 3% to an invoice when the customer pays by card? In most states a credit card surcharge is legal, but only on credit cards and only up to your actual processing cost. You also have to tell your processor and the customer first, in the way the card networks require. Those network rules are contractual, not statutory: Visa sets its conditions in its published rules, and they bind you through your agreement with your processor. In a handful of states, however, state law says no. And a surcharge set as a flat percentage on every card, debit included, breaks the rules the day it goes live.
For a plumbing, HVAC or electrical business, card fees on a $1,200 repair are real money, so passing them on is a fair question. Here is what a legal credit card surcharge looks like, where the states draw the line, and why a cash discount can get you the same result with fewer rules.
What the card networks allow
Federal law no longer bans surcharges; that ban expired in 1984. Instead, most of the rules you have to follow come from the card networks, through your agreement with your processor. Start with Visa, which sets four conditions in its merchant surcharge guidance and published rules:
- The cap. The surcharge cannot exceed 3%, or your actual cost of accepting that card if it is lower.
- Credit only. No surcharge on debit or prepaid cards, “regardless of whether a Cardholder selects the ‘credit’ or ‘debit’ button”. A customer paying with a debit card pays the invoice amount.
- Thirty days’ notice to your processor. You must notify your acquirer, the bank or processor that handles your card payments, in writing at least 30 days before you first charge a surcharge. If you plan to announce the fee publicly first, for example on your website, the notice has to reach your processor 30 days before that announcement.
- Disclosure before and after. You have to disclose the fee at the point of entry and again at the point of payment. It must also appear as its own line on the receipt. For a business that works in customers’ homes, the estimate is the natural place for the first notice.
Mastercard’s published page still shows a 4% cap and the same ban on debit and prepaid cards. It also says Mastercard is revising its surcharge rules and has stopped requiring merchants to register. In practice, a business that takes Visa works to Visa’s 3%. American Express requires you to apply any fee on its cards equally to other payment cards. It also publishes restated merchant rules on October 23, 2026. Discover’s terms are in your processor agreement.
Where state law bans or limits a credit card surcharge
State law sits on top of the network rules. The table covers the states whose statutes or official guidance we read on September 29, 2026. Laws in this area have changed often since 2023, so check your own state before you start. Do not rely on an older list either, including Visa’s, because it still shows Oklahoma as a ban.
State surcharge rules at a glance
| State | Surcharge allowed? | What state law adds |
|---|---|---|
| Connecticut | No | Surcharges banned for any payment method. A cash discount is allowed with a posted notice. |
| Massachusetts | No | Credit card surcharges banned. A clearly disclosed cash discount offered to everyone is allowed. |
| Maine | No | Credit and debit card surcharges banned; a discount is not a surcharge. |
| Puerto Rico | No | Card surcharges banned; the ban was upheld by the federal appeals court in May 2025. |
| California | No, in practice | The statute (Civil Code §1748.1) still bans surcharges. The 2018 court ruling against it protected only the five businesses that sued. |
| Oklahoma | Yes, since November 1, 2025 | Credit cards only, capped at 2% or actual cost, whichever is less. The amount must be posted at the entrance and point of sale, or told to the customer by phone. |
| Colorado | Yes | Up to 2%, or up to your actual processing fee. Prescribed sign wording, a separate receipt line, and no surcharge on debit cards, with or without a PIN. |
| Minnesota | Yes | Up to 5% under state law, which Visa’s 3% undercuts. In person, tell the customer and post a sign. |
| New Jersey | Yes | No more than your actual cost. The amount must be disclosed at entry and at the point of sale; saying only that “a surcharge applies” is not enough. |
| New York | Yes | No more than your cost, and the posted or quoted price must be the full card price including the surcharge. |
| Kansas | Yes | A clear notice of the amount at the point of entry or sale, before the transaction. |
| Texas and Florida | Unsettled | Both statutes still contain a ban. Federal courts have held them unconstitutional, Florida’s in 2015 and Texas’s as applied to particular merchants in 2018, and the Texas attorney general says its law “remains enforceable in some contexts”. Get advice before surcharging in either state. |
New York’s total-price rule and the lower state caps
Two lines in that table catch field businesses in particular. In New York, a percentage on the invoice is not enough. The state’s consumer protection guidance lists one practice as illegal: a sign or receipt line announcing a card fee, without the total card price posted first. So for a contractor, the estimate or quote shows the price the customer will pay by card. And in Oklahoma and Colorado, a processor’s default 3% setting is above the state cap.
A worked example on a $1,200 repair
The job below is hypothetical, and the processing rate is an assumption. Your own statement shows your real cost. An HVAC repair comes to $1,200 before tax, and the customer pays with a Visa credit card. Say your processor charges 2.9% plus 30 cents, or $35.10 on this job.
- Kansas, with Visa’s rules: a 2.9% surcharge adds $34.80. The customer pays $1,234.80 and you recover almost all of the fee.
- Oklahoma: the cap is 2%, so the most you can add is $24.00.
- New York: the quote shows $1,234.80 as the card price. A quote of $1,200 “plus 2.9% for cards” breaks the state’s total-price rule.
- Any state, debit card: no surcharge. The customer pays $1,200.
- Connecticut or Massachusetts: no surcharge, but you can price the job at $1,234.80 and offer $34.80 off for cash, check or bank transfer.
Sales tax can follow the surcharge. Washington’s Department of Revenue says surcharges are part of the taxable selling price when the sale is taxable. Similarly, Minnesota lists credit card processing fees passed on to customers as part of the sales price. Colorado’s revenue department, however, has said a surcharge that complies with state law is not. Many contractor services are not taxable at all. Our guide to sales tax on contractor jobs explains how states split repair, improvement and materials, and your accountant can confirm how your state treats a surcharge.
The cash discount alternative
A cash discount reaches the same place from the other direction. You set your price at the card price, then offer a discount to customers who pay by cash, check or bank transfer. Federal law protects that, under 15 U.S.C. §1666f. A card issuer cannot forbid it, and a discount offered to everyone and clearly disclosed is not a finance charge. It is also the only route open in states that ban surcharges and allow discounts, such as Connecticut and Massachusetts.
It has to be a real discount, though. Visa warns that a “card price” reached by adding a fee at checkout “may be treated as a surcharge” under its rules. A program marketed as a “cash discount” can work exactly that way. If your quote shows $1,200 and the card terminal adds a “non-cash adjustment”, you are surcharging, with all the conditions above. Price at the card amount and discount from there.
A “convenience fee” is a different thing again. Under Visa’s rules it is a flat charge for an unusual payment channel, such as taking card payments by phone when you normally do not. It cannot be a percentage, and you cannot add it on top of a surcharge. Say your normal way of getting paid is a card on site or a payment link on the invoice. Then calling a percentage fee a convenience fee does not change what it is.
What the pending card settlement would change
A proposed settlement between merchants and Visa and Mastercard would set a single cap for both networks: 3% or your cost of acceptance, whichever is lower. It would also let merchants decline whole categories of cards, such as premium rewards cards. It received preliminary court approval on June 9, 2026, and a final approval hearing is scheduled for November 2026, according to Visa’s latest quarterly filing and a September 2026 filing by a card issuer. None of it is in force yet. If the court approves it, the networks then have 90 days to change their rules. So do not decline premium cards or rely on the new terms until your processor confirms they apply.
Before you add a card fee
Start with your state line in the table. Where your state allows surcharges, the steps are short. First, tell your processor in writing 30 days ahead. Next, set the fee at or below 3% and your real cost, and switch it off for debit and prepaid cards. Then put the fee, or in New York the full card price, on the estimate as well as the receipt. Finally, tell customers before the job, not at the card terminal.
But if surcharges are banned or unsettled where you work, price at the card amount and offer a discount for cash, check or bank transfer instead. The same route works if the rules feel like more trouble than the fee. Either way, the conversation about how the customer will pay belongs at the quote. For the jobs where payment does not arrive at all, our guide to mechanics liens covers the deadlines that protect it.
ON THE FEE NOBODY QUOTED
The price a customer pays should be the price they saw first.
A card fee that first appears at the terminal is the one that starts an argument, and in New York it breaks the law. SendWork keeps each job’s quote and invoice together, so the price you agreed at the estimate is the one you bill.
