New Mexico Credit Card Surcharge Laws

Quick Summary:

• Credit card surcharging is legal in New Mexico as of 2025
• No state-specific restrictions exist beyond federal requirements
• Merchants must follow federal 4% cap (3% for Visa transactions)
• Cash discount programs remain a legal alternative
• State agencies may charge convenience fees for credit card payments
• Debit card surcharging is prohibited under federal law

New Mexico takes a hands-off approach to credit card surcharging, allowing businesses to implement surcharge programs provided they comply with federal regulations and card network rules. While the state attempted to restrict surcharging through House Bill 545 in 2013, that legislation never passed, leaving businesses free to surcharge within federal guidelines. This gives New Mexico merchants flexibility in how they recover credit card processing costs while maintaining transparent pricing structures.

Legal Disclaimer: This information is for reference only and does not constitute legal advice. Consult with an attorney before implementing pricing programs, as rules can change and vary by business type.

What's Allowed

New Mexico businesses can legally implement:

• Credit card surcharges - add fees to credit card transactions up to federal limits
• Cash discount programs - offer reduced prices for cash or check payments
• Dual pricing systems - display separate prices for different payment methods
• Convenience fees (for government entities) - state agencies can charge processing costs
• Transparent pricing structures - clearly disclose all pricing and surcharge policies
• Alternative payment incentives - promote non-credit card payment methods

What's Not Allowed

New Mexico businesses cannot:

• Surcharge debit cards - prohibited under federal Durbin Amendment
• Exceed federal caps - 4% maximum (3% for Visa)
• Exceed actual processing costs - surcharges cannot be used for profit
• Hide surcharge fees - all fees must be clearly disclosed before payment
• Use deceptive pricing - pricing must be transparent and consistent
• Surcharge without proper disclosure - customers must be informed before completing transactions

Penalty For Non-Compliance

While New Mexico doesn't have state-specific penalties for surcharge violations, businesses face potential consequences from multiple sources:

• Federal trade practice violations - FTC action for deceptive business practices
• Card network penalties - Visa, Mastercard, and other networks impose fines for non-compliance with their rules
• Consumer protection enforcement - New Mexico Attorney General's Consumer Protection Division can investigate complaints
• Loss of payment processing privileges - payment processors may terminate merchant accounts for rule violations

New Mexico consumers who believe they've encountered improper surcharging can file complaints with the New Mexico Department of Justice Consumer Protection Division or through their Electronic Complaint Submission system.

Surcharging vs. Cash Discounts in New Mexico

New Mexico businesses have two primary options for recovering credit card processing costs: implementing surcharges or offering cash discounts. While these approaches achieve similar economic results, they differ in structure and customer perception.

Credit Card Surcharging

Surcharging involves listing a base price and adding a fee for credit card payments. For example, a $100 service might include a 3% surcharge for credit card payments, bringing the total to $103 when paying by card. This approach clearly shows customers the additional cost of using credit cards.

Cash Discount Programs

Cash discounts involve offering reduced prices to customers who pay with cash or check. Using the same example, a business might list a service at $103 but offer it for $100 to cash-paying customers. From an economic standpoint, the result is identical to surcharging, but the framing differs.

Dual Pricing

Dual pricing allows businesses to display both the credit card price and the cash/check price simultaneously, giving customers clear information about their payment options and potential savings. This approach is commonly seen at gas stations, where signs show separate prices for cash and credit purchases.

Types of Businesses That Must Follow New Mexico's Surcharge Laws

Since New Mexico primarily relies on federal regulations for surcharging, these rules apply broadly to all businesses that accept credit card payments. This includes:

• Retail stores and merchants
• Service providers (repair shops, professional services, contractors)
• Restaurants and hospitality businesses
• Online retailers serving New Mexico customers
• Small businesses and sole proprietors
• Medical and dental practices
• Professional services (legal, accounting, consulting)

Special considerations:

• Government entities can charge convenience fees under Section 6-10-1.2
• Businesses must comply with card network rules (Visa, Mastercard, etc.) in addition to federal law
• Industry-specific regulations may apply additional requirements for certain business types

New Mexico Credit Card Surcharge FAQs

Did House Bill 545 ban surcharging in New Mexico?

No. While House Bill 545 was introduced in 2013 with the intention of prohibiting credit card surcharges, the bill died in committee and was never enacted into law. This means surcharging has always been legal in New Mexico under federal guidelines.

Can New Mexico gas stations charge different prices for cash versus credit?

Yes, gas stations commonly display dual pricing with separate cash and credit prices. This is legal under both surcharging rules and cash discount programs. Both prices must be clearly displayed with equal prominence, which is why you typically see both prices listed on gas station signs.

What's the maximum surcharge I can charge in New Mexico?

The federal cap is 4% of the transaction amount, but Visa limits surcharges to 3%. Your surcharge must also not exceed your actual processing costs. For example, if your processor charges you 2.6% per transaction, you cannot surcharge more than 2.6%, even though the federal cap allows up to 4%.

Do I need to notify anyone before implementing a surcharge program?

Yes, federal rules require you to notify the card networks (Visa, Mastercard, American Express, Discover) at least 30 days before implementing surcharges. You must also clearly disclose surcharges to customers before they complete their purchases.

Can New Mexico service businesses surcharge credit cards?

Yes, service businesses including contractors, consultants, and professional service providers can legally implement credit card surcharges in New Mexico. The same federal requirements apply: clear disclosure, caps at 4% (or 3% for Visa), and surcharges not exceeding actual processing costs.

Are there any industries in New Mexico that cannot surcharge?

New Mexico does not have industry-specific surcharge prohibitions. However, businesses should check with their professional associations and licensing boards, as some industries may have ethical or professional guidelines that restrict surcharging practices.

For more information about consumer protection in New Mexico, contact:

• New Mexico Department of Justice: https://www.nmag.gov
• Consumer Protection Division: Electronic Complaint System
• New Mexico Secretary of State: https://www.sos.nm.gov

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