Credit Card Surcharges Surge: 34% of Merchants Now Charge Fees

URGENT UPDATE: A recent surge in credit card surcharges is reshaping how consumers pay for their meals. According to new data from J.D. Power, as of 2025, a staggering 34% of merchants now impose fees on credit card transactions, up from just 20% a year earlier. This shift is becoming a pressing concern for consumers who rely on credit card rewards.

With the average surcharge hovering around 3%, many diners are now facing a tough choice at the register: pay the fee or forgo the rewards they’ve come to expect. One recent Reddit discussion highlighted the growing frustration, asking, “Since when did 3% CC fees at restaurants become the new normal?”

Why This Matters NOW: The cost of accepting credit cards has skyrocketed, leading businesses to pass these expenses onto customers. In 2022, U.S. businesses incurred over $160 billion in interchange fees, which are charged by credit card companies like Visa, Mastercard, American Express, and Discover. As a result, merchants are increasingly relying on surcharges to offset these costs, leaving consumers feeling the pinch.

The ongoing debate pits credit card companies against merchants. While credit card firms argue that interchange fees are a necessary business expense, merchants contend that these costs are becoming untenable. As Don Apgar, director of merchant payments at Javelin Strategy & Research, notes, “We’re approaching a tipping point where consumers are actively saying they won’t pay the surcharge.”

Context: The trend towards surcharging has accelerated since the COVID-19 pandemic, which normalized additional fees and charges across various sectors. As restaurants and other businesses struggled to survive, many began adding surcharges to help cover their costs. This practice, once rare, is now becoming standard in many establishments.

What to Watch For: As consumers grapple with their payment choices, lawmakers are also taking notice. The Credit Card Competition Act was introduced in Congress in 2022 to promote competition in the credit card payment network market, potentially aiming to lower costs for merchants. Though the bill has yet to pass, it highlights growing legislative interest in this issue.

Your Options: If faced with a surcharge, consider paying with cash, a check, or a debit card to avoid the fee. Research from J.D. Power indicates that 41% of credit card users have opted out of using cards due to surcharges. If you choose to pay with a credit card, select one that offers rewards exceeding the surcharge. For example, a card providing 3% cash back on dining could offset the surcharge, making it a viable option.

Additionally, consider stacking your rewards by using a cash-back app or card-linked offers, especially at chain restaurants and local eateries. If you suspect a restaurant is illegally charging a surcharge, you can file a complaint with your card issuer, the Better Business Bureau, or your state’s attorney general.

In a world where dining out is increasingly influenced by payment processing fees, consumers must navigate these challenges while enjoying their meals. The balance between rewards and surcharges will shape the future of dining experiences across the country.

Stay informed on this developing issue as it unfolds, and be prepared to adjust your payment strategies accordingly.