A credit card surcharge could refer to an extra fee charged for purchase, usually at point of purchase with the credit card or any other paying mechanism a credit company might offer, such as checks. It might also refer to charges assessed to receive a credit card payment, as is common in any sales establishment or with a vendor of any sort. There can be some strict rules governing what credit card surcharge types are allowable, and under what circumstances credit cards are accepted.
In many places, credit companies do not allow vendors to assess a credit card surcharge to purchases made by consumers. This is true of companies like Visa® and Master Card®. Some states in the US don’t allow surcharges at all on any cards, and with companies like American Express® or Discover, these fees can’t be passed on to a consumer if a vendor accepts Visa® and Master Card®, too. What is permissible is for vendors to offer a lower price for people who pay with cash or checks, called a cash discount, and offers like these may be found in all states. It’s also the case that in many foreign countries, it’s legal to assess an additional percentage to a purchase as an exchange rate charge.
A lot of times if vendors can assess a credit card surcharge, they are doing so to make up for the fact that they have to pay a percentage of the money they collect by credit to each credit card company. Essentially, they’re trying to recoup their losses. Even small vendors find themselves in this scenario, and there are few places where this occurs more obviously than companies like PayPal®, which is used by many small vendors or service providers as a bank. Companies like PayPal® allow vendors to accept credit cards, but they can charge 3% or more for each transaction, which can significantly reduce amount made. In this case PayPal ® keeps the money it collects, though some of it may need to be returned to credit card companies.
Other times, credit card companies benefit by assessing a fee. This is common when people withdraw cash from their credit account or if they use things like checks for purchase that draw money from available credit. Fees on these amounts may vary, but are usually added onto a credit bill and become money owed.
There are a variety of fees for credit cards that don’t really represent a credit card surcharge. These include fees for late payment, fees for exceeding balance, and many others. The difference between these and surcharges is that the credit card surcharge is typically an amount added to total purchase, instead of being separated out from the purchase and added to a bill at a later point.