Is It Legal to Charge a Credit Card Fee in Texas? (2026)

What the Texas Business and Commerce Code Says About Surcharges

The starting point is a flat ban. Under Tex. Bus. & Com. Code § 604A.0021, a seller may not impose a surcharge on a buyer who uses a credit card instead of cash, a check, or a similar means of payment. The same section carves out state agencies, counties, other governmental entities, and private schools.

Debit cards get the same treatment. Tex. Bus. & Com. Code § 604A.002 bars a surcharge on buyers who pay with a debit or stored value card, with the same exceptions. A "card fee" is not a gray area in most retail settings – it is the exact conduct the chapter targets.

How a Federal Ruling Changed the Texas Surcharge Ban

The ban is still on the books, but its reach narrowed. Federal court litigation invalidated the parts of the Texas surcharge rules that limited how merchants describe their own prices, on free-speech grounds. That shifted the fight from what a business charges to how it talks about the charge.

The underlying pricing rule survives. Businesses generally may not make card users pay more than the posted price, yet they keep room to explain price differences honestly.

How Surcharges Differ From Cash Discounts and Convenience Fees

The definitions section does the heavy lifting. Tex. Bus. & Com. Code § 604A.001 defines a surcharge as a price increase imposed on a card-paying buyer but not on others, and says the term excludes a discounted price for buyers who pay cash. Same math, different framing, opposite result.

Convenience fees charged by public bodies sit in their own lane. Counties and cities may authorize officers to accept cards and collect a processing reimbursement fee under Tex. Loc. Gov't Code § 132.002, and Tex. Loc. Gov't Code § 132.003 generally caps that fee at five percent of the charge being paid, or at the vendor's actual transaction cost.

Other public payments follow similar rules. Tax collectors may add a processing fee of up to five percent under Tex. Tax Code § 31.06, agencies using the state internet portal may recover electronic payment costs under Tex. Gov't Code § 2054.1115, public colleges may charge a reasonable service charge on tuition payments under Tex. Educ. Code § 54.5011, and water districts may collect processing fees under Tex. Water Code § 49.2121.

Card Network Rules and Disclosure Steps for Texas Merchants

State law is only half the picture. Card networks and processors set their own surcharge, registration, and receipt-disclosure terms in merchant agreements, and those apply on top of the statute.

Texas statutes model the disclosure habit worth copying. Private schools may charge a convenience or service charge under Tex. Bus. & Com. Code § 111.002, but only in an amount reasonable and necessary to cover processing costs, and they must notify the payer before accepting the card.

Three habits usually keep a Texas business out of trouble:

• Post one price and offer a clearly labeled cash discount instead of a card add-on.
• State your payment terms and any lawful fee before the transaction, not on the receipt afterward.
• Keep invoices, signage, and checkout screens using the same wording.

Penalties and Enforcement Risks for Adding a Card Fee

The consequences are concrete. Under Tex. Bus. & Com. Code § 604A.003, a person who knowingly violates the credit or debit surcharge bans is liable to the state for a civil penalty of up to $500 per violation, and the attorney general or a local prosecuting attorney may sue to recover it or to enjoin the conduct.

There is a built-in second chance. Before filing, the state must send a notice explaining the prohibitions and how to comply, and fixing the problem within 30 days cures the violation. A business that already received one notice gets no further cure period.

Create Your Business Invoices With ConsumerShield

Clear paperwork prevents most surcharge headaches. A well-worded invoice or receipt template can help you show a cash discount correctly and reduce the risk of a fee that reads as an unlawful markup. For help drafting yours, explore ConsumerShield's online forms and guides today.