Maryland Credit Card Surcharge Laws

Quick Summary:

• Credit card surcharging is legal in Maryland up to 4% maximum
• Recent legislative efforts to limit surcharges to processing costs failed in 2024
• Businesses must disclose surcharges clearly to customers before transactions
• Debit card surcharging prohibited under federal law
• Card network rules limit Visa surcharges to 3%, Mastercard to 4%

Maryland maintains a straightforward approach to credit card surcharging, allowing businesses to add fees up to the federal maximum of 4% on credit card transactions. While the state doesn't impose additional restrictions beyond federal requirements, Maryland legislators have recently attempted to introduce more consumer-friendly limitations that would cap surcharges at merchants' actual processing costs.

The state's business-friendly surcharging environment makes it relatively simple for merchants to implement credit card fees, provided they follow proper disclosure requirements and stay within federal and card network limits. However, businesses should monitor potential legislative changes as Maryland continues to evaluate stricter surcharge regulations.

Legal Disclaimer: This information is for reference only and does not constitute legal advice. Maryland's surcharge laws may change as new legislation is considered, so businesses should consult with an attorney before implementing surcharging programs.

Is Credit Card Surcharging Legal in Maryland?

Yes, credit card surcharging is legal in Maryland following federal guidelines without additional state-imposed restrictions. Maryland businesses can add surcharges up to 4% of the transaction amount on credit card payments, making the state one of the more permissive jurisdictions for merchant fee recovery.

Maryland follows the standard federal framework established after the 2013 class action lawsuit that opened surcharging opportunities nationwide. Businesses must comply with federal regulations and card network rules, but face no additional state-level caps or restrictions beyond basic disclosure requirements.

However, Maryland's legislative landscape shows ongoing interest in consumer protection. In 2024, legislators introduced bills HB1481 and SB0520 that would have limited surcharges to merchants' actual processing costs rather than the full 4% federal maximum. While these bills failed to pass, they indicate potential future restrictions on surcharging practices.

What's Allowed

Maryland businesses can implement surcharging under these conditions:

• Charge up to 4% surcharge on credit card transactions (3% for Visa)
• Apply consistent rates across all credit card transactions regardless of brand
• Use percentage-based fees calculated from the total transaction amount
• Disclose surcharges clearly to customers before transaction completion
• Show surcharges on receipts as separate line items for transparency
• Implement for all channels - in-person, online, and telephone transactions

What's Not Allowed

Maryland law and federal regulations prohibit these practices:

• Surcharging debit cards - prohibited under federal Durbin Amendment
• Exceeding 4% maximum set by federal regulations (3% for Visa)
• Hidden or undisclosed fees - must inform customers before transactions
• Profit from surcharges - fees should only recover processing costs
• Inconsistent application - cannot vary rates between credit card brands
• Flat dollar surcharges - must be percentage-based, not fixed amounts

Penalty For Non-Compliance

Maryland enforcement of surcharging violations occurs through several mechanisms:

• Consumer complaints filed with the Maryland Attorney General's Consumer Protection Division
• Card network penalties for violations of Visa, Mastercard, or other brand rules
• Federal enforcement under federal surcharging regulations
• Maryland Consumer Protection Act violations for unfair or deceptive practices

Maryland consumers can file surcharge complaints through the Maryland Consumer Protection Portal or by calling the Consumer Hotline at 410-528-8662. The Consumer Protection Division provides mediation services to help resolve disputes between consumers and businesses.

Recent Legislative Efforts in Maryland

Maryland legislators have shown increasing interest in consumer protection regarding credit card surcharges. In 2024, two significant bills were introduced that would have dramatically changed the state's surcharging landscape, though both ultimately failed to pass.

House Bill 1481 and Senate Bill 520 proposed identical amendments to Maryland's consumer protection laws. These bills would have prohibited retail businesses from charging surcharges that exceed the actual cost of processing credit or debit card transactions. Under these proposals, a business paying 2.5% in processing fees could only surcharge 2.5%, even though federal law allows up to 4%.

The proposed legislation defined violations as "unfair, abusive, or deceptive trade practices" subject to enforcement under the Maryland Consumer Protection Act. This would have given the Attorney General's office broader authority to investigate and penalize excessive surcharging practices.

While these bills failed in the 2024 session, their introduction signals ongoing legislative interest in surcharge reform. Maryland businesses should monitor future legislative sessions as similar consumer protection measures may be reintroduced with broader support.

How Card Network Rules Affect Maryland Businesses

Maryland businesses must navigate both federal regulations and individual card network rules when implementing surcharges. Each major card brand has established its own maximum rates and disclosure requirements that can be more restrictive than federal law.

Visa surcharge rules:

• Maximum 3% surcharge rate (lower than 4% federal limit)
• 30-day advance notification required before implementing surcharges
• Must apply same surcharge rate to all Visa credit cards
• Clear disclosure required at point of sale and on receipts

Mastercard surcharge rules:

• Maximum 4% surcharge rate (matches federal limit)
• Advance registration required with Mastercard
• Consistent application across all Mastercard credit products
• Prominent disclosure at multiple touchpoints required

American Express and Discover:

• Follow federal 4% maximum guidelines
• Individual network notification and compliance requirements
• May have specific disclosure format requirements

Maryland businesses violating card network rules risk penalties including fines, processing restrictions, or termination of merchant agreements. These network-level consequences can be more immediate and severe than state-level enforcement actions.

Is Debit Card Surcharging Legal in Maryland?

No, debit card surcharging is illegal in Maryland and all U.S. states under federal law. The Durbin Amendment to the Dodd-Frank Act specifically prohibits merchants from adding surcharges to debit card transactions, regardless of how they're processed or which network handles them.

This federal prohibition applies to all debit transaction types:

• PIN debit transactions - traditional debit requiring personal identification number entry
• Signature debit transactions - debit cards processed through credit card networks
• Prepaid debit cards - generally prohibited from surcharging under federal rules

The federal ban exists because debit card interchange fees are capped at much lower rates than credit cards. Large card issuers face federal limits of 0.05% plus $0.21 per debit transaction, making debit processing significantly less expensive than credit card processing.

Maryland businesses must ensure their payment systems properly identify debit cards to avoid inadvertent surcharging. When customers use debit cards, merchants can encourage PIN entry to qualify for the lowest possible processing rates without adding any surcharges.

Maryland Credit Card Surcharge FAQs

Can Maryland restaurants add surcharges to both dine-in and takeout credit card orders?

Yes, Maryland restaurants can add credit card surcharges up to 4% (3% for Visa) on all credit card transactions including dine-in, takeout, and delivery orders. They must clearly post surcharge policies and ensure the fee appears as a separate line item on receipts. Online ordering systems must display surcharge information during checkout.

Do Maryland contractors need special approvals to charge credit card fees on large invoices?

No special approvals are required for Maryland contractors to add credit card surcharges to invoiced work. Standard disclosure rules apply - contractors must inform clients about surcharge policies before work begins or when presenting invoices. Surcharges cannot exceed 4% (3% for Visa) and should reflect actual processing costs.

How do the failed 2024 Maryland bills affect current surcharge practices?

The failed HB1481 and SB0520 bills have no immediate effect on current practices since they didn't become law. Maryland businesses can still charge up to the federal 4% maximum (3% for Visa). However, the bills indicate potential future restrictions, so businesses should monitor legislative developments and be prepared for possible changes.

Can Maryland gas stations charge different credit card surcharges for different fuel grades?

Maryland gas stations must apply consistent surcharge rates across all credit card transactions. They cannot charge different surcharge percentages for regular, mid-grade, or premium fuel. However, they can use dual pricing showing separate cash and credit prices, or offer cash discounts from posted credit card prices.

Are Maryland online retailers subject to the same surcharge laws as brick-and-mortar stores?

Yes, Maryland surcharge laws apply equally to online and physical retailers. E-commerce businesses must disclose surcharges clearly during the checkout process before customers complete their transactions. The same 4% maximum applies (3% for Visa), and surcharges must be shown as separate line items on receipts or order confirmations.

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