Why Paying With a Credit Card Will Cost You More in Some States

New York is the latest state to allow surcharges on customers paying with a credit card.

Paying with credit card
Photo: Tim Robberts/Getty Images

Depending on where in the U.S. you live, you might assume that the price of something is concrete — regardless of how you pay for it. In reality, that’s not the case.

Retailers in most U.S. states have the right to charge customers a surcharge when they use a credit card to make their purchase — and the number of states who have ruled against these surcharges are dwindling.

Most recently, New York joined the majority after the highest court in the state gave restaurants and retailers permission to charge customers extra for using a credit card. The case went all the way up to the U.S. Supreme Court before being sent back to New York’s highest judicial authority, The Points Guy reported. The ruling echoed a similar battle in California, where the court ruled against the state’s no credit card surcharge law in January.

Both challenges follow a 2013 settlement between credit card companies and merchants where it was agreed that customers using a credit card to make a purchase should pay for the merchant fees via a credit card surcharge.

In states that have passed laws prohibiting this practice, the credit card surcharge is paid by the merchant, meaning that when you pay for a meal or product on your credit card, the credit card company charges the merchant between 2 to 4 percent of your purchase as a fee for letting you use their card at the business.

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