North Carolina Credit Card Surcharge Laws

Quick Summary:

• Credit card surcharging is currently legal in North Carolina with no state restrictions
• Merchants must comply with federal regulations and card network rules (4% maximum, 3% for Visa)
• House Bill 13 may change this in 2025, potentially adding disclosure requirements and penalties
• Debit card surcharging remains illegal under federal law
• Businesses must clearly disclose surcharge fees to customers before processing payments

North Carolina currently allows businesses to add surcharges to credit card transactions, following federal guidelines rather than imposing state-specific restrictions. However, the landscape may change significantly if pending legislation passes. Surcharging credit cards is currently legal in North Carolina. That said, there have been several attempts to ban surcharges over the years – including HB 209 in 2023 and HB 626 in 2011. Most recently, House Bill 13 was introduced in 2025 and is currently making its way through state legislature. If it passes, new restrictions will go into effect on October 1, 2025.

Unlike states with complex surcharge regulations, North Carolina has maintained a relatively straightforward approach that defers to federal law. This makes compliance simpler for businesses, though upcoming legislative changes could introduce new requirements for disclosure, pricing transparency, and operational restrictions.

Legal Disclaimer: This information is for reference only and does not constitute legal advice. Surcharge laws can change, and businesses should consult with an attorney before implementing surcharge programs.

Is Credit Card Surcharging Legal in North Carolina?

Yes, credit card surcharging is legal in North Carolina as of 2025. The state does not have specific laws prohibiting merchants from adding surcharges to credit card transactions, which means businesses must follow federal regulations and card network rules.

As of February 2025, no state laws block credit card surcharging in North Carolina, but the practice has strict compliance requirements. Before processing a payment, MSPs must inform clients of additional fees and ensure surcharge details are clearly visible on invoices, at the point of sale, or online checkout pages.

Under current federal law and card network regulations, businesses can surcharge up to 4% of the transaction amount (3% for Visa cards). The surcharge cannot exceed the merchant's actual cost of processing the credit card transaction and cannot be used as a profit center.

What's Allowed

North Carolina businesses can currently implement these surcharge practices:

• Add surcharges up to 4% of the transaction amount (3% for Visa transactions)
• Pass through actual processing costs to customers who choose credit card payments
• Offer alternative payment methods like cash, check, or debit without surcharges
• Display surcharge information at the point of sale, on websites, or in phone transactions
• Apply surcharges to credit cards only - never to debit cards or prepaid cards

What's Not Allowed

Current federal regulations and card network rules prohibit these practices:

• Surcharging debit cards - this is illegal in all 50 states under federal law
• Exceeding actual processing costs - surcharges cannot be used to generate profit
• Surprise fees - customers must be informed of surcharges before completing transactions
• Discriminatory pricing - cannot charge different surcharge rates for different credit card brands
• Surcharging if only accepting credit cards - must offer alternative payment methods

Penalty For Non-Compliance

While North Carolina currently has no state-specific penalties for surcharge violations, businesses can face consequences through other channels:

• Card network penalties - Visa, Mastercard, and other networks can fine merchants or terminate processing privileges
• Federal regulatory action - violations of federal consumer protection laws
• Customer disputes - chargebacks and complaints through credit card companies
• Civil lawsuits - customers may pursue legal action for deceptive practices

If House Bill 13 passes, violations could result in civil penalties of up to $500 per offense starting October 1, 2025.

How Surcharging Laws in North Carolina Have Changed Over Time

North Carolina has a notable history of legislative attempts to restrict or regulate credit card surcharging, reflecting ongoing tension between business interests and consumer protection.

2011 - House Bill 626: The first major attempt to ban surcharging entirely. House Bill 626 (H626) was introduced in 2011 to prohibit credit card surcharges. The bill would have classified violations as unfair and deceptive trade practices and potential penalties would include fines and legal action. However, H626 did not pass and died in committee, leaving credit card surcharging legal in North Carolina under existing federal and card network regulations.

2023 - House Bill 209: House Bill 209 (HB626), titled the Consumer Credit Card Protection Act, was introduced in North Carolina in 2023. The bill aimed to prohibit businesses, state agencies, local governments, restaurants, and landlords from imposing extra charges on credit or debit card payments. The bill proposed civil penalties for violations, with fines of up to $2,500 for a first offense and $5,000 for subsequent violations. This bill also failed to pass.

2025 - House Bill 13: North Carolina House Bill 13 Charges for Credit, Charge, & Debit Cards was first introduced in January 2025. Unlike previous attempts that sought to ban surcharging entirely, this new 2025 proposes regulation rather than prohibition. If the law passes, it will take effect on October 1, 2025.

The 2025 bill represents a shift from outright prohibition to regulation, suggesting lawmakers recognize the business need for cost recovery while still protecting consumers through disclosure requirements.

Is Debit Card Surcharging Legal in North Carolina?

No, debit card surcharging is illegal in North Carolina and in all 50 states under federal law. This prohibition applies even when debit cards are processed as credit transactions.

MSPs should ensure their payment systems distinguish between credit and debit transactions to remain compliant. Businesses must have systems in place to identify debit cards and ensure surcharges are only applied to credit card transactions.

The federal prohibition on debit card surcharging stems from the Durbin Amendment, which regulates debit card interchange fees differently than credit cards. Violating this rule can result in significant penalties from card networks and federal regulators.

North Carolina Credit Card Surcharge FAQs

What happens if North Carolina's House Bill 13 passes?

If HB 13 becomes law on October 1, 2025, businesses will face new disclosure requirements including posting surcharge information at store entrances and checkout pages. Online merchants would need to disclose surcharge fees on the homepage and checkout page, and phone sales would require verbal disclosure. Here's another important contingency—merchants would not be allowed to surcharge transactions if they only accept credit cards.

Can North Carolina restaurants add service charges to cover credit card fees?

Yes, restaurants can add service charges, but they must clearly disclose these fees and offer alternative payment methods. The charges cannot exceed the actual cost of processing credit cards and must be presented transparently to customers before payment.

How should North Carolina businesses prepare for potential law changes?

Businesses should review their current surcharge practices, ensure proper disclosure procedures are in place, and train staff on surcharge policies. With HB 13 making its way through the North Carolina legislature, merchants should prepare now in case the bill becomes law later this year. If it passes, the new rules will take effect on October 1, 2025, giving you a short window to make adjustments.

What's the maximum surcharge businesses can charge in North Carolina?

Currently, businesses can charge up to 4% of the transaction amount (3% for Visa cards), but the surcharge cannot exceed the merchant's actual processing costs. This means if you only pay 2.5% in processing fees, you cannot charge customers 4%.

Where can North Carolina consumers file complaints about improper surcharges?

Consumers can file complaints with the North Carolina Attorney General's Consumer Protection Division at 1-877-5-NO-SCAM or dispute charges directly with their credit card company under federal consumer protection laws.

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