What exactly is a surcharge?

A surcharge is an additional fee that businesses charge customers to offset the cost of processing credit card payments. Whenever a business accepts a credit card, they incur a small fee from the card brand and the credit card processor, which can deter some small businesses from accepting credit cards.

Surcharge fees typically range from 1% to 3% of the total bill. Although this fee might discourage customers from making a purchase, they can avoid it by paying with a debit card or cash, as businesses cannot apply surcharges to these payment methods.

Now that you know what surcharges are, why they exist, and why companies impose them, you’ll understand the extra fee on your bill the next time you see it.