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Credit Card Surcharges

Sometimes paying with a credit card or debit card will attract a surcharge or fee – here's what you need to know.

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A credit card surcharge is a fee that's charged by some businesses when you pay with your card. This charge will usually cost you between 1% and 2% of the transaction amount and helps businesses cover the cost of processing the card payment.

Not all businesses apply a surcharge and there are strict regulations around how much they can cost. So, let's take a closer look at how surcharges work and ways you can avoid them.

What is a credit card surcharge and when is it applied?

A credit card surcharge is a fee that merchants can apply to your credit card transactions, on top of the advertised retail price.

This surcharge helps them cover the cost of accepting credit cards as a payment method and can only be. Some businesses also add a surcharge for debit cards and other types of payments that cost them money.

Surcharge example

To put this in perspective, let's say a cafe owner decides to set up their EFTPOS system to accept all American Express, Mastercard and Visa card payments.

Every time someone pays with a card, the cafe is charged a fee of between 0.5% to 2% for processing the payment. To help cover this cost, the cafe owner could choose to apply a surcharge or increase the prices on their menu.

How much is a credit card surcharge?

Credit card and debit card surcharges typically range from 0.5% to 2% of a transaction. But businesses can set their own surcharge amount as long as it is based on the cost of accepting a particular type of payment. Surcharges can't be worth more than that cost.

As a general guide, the Reserve Bank of Australia (RBA) and the Australian Competition and Consumer Commission (ACCC) have outlined the following costs per transaction, based on the type of card being used:

  • Visa and Mastercard credit cards: 1% to 1.5%
  • American Express credit cards: 1.5% to 2%
  • EFTPOS: Usually less than 0.5%
  • Visa and Mastercard debit cards: 0.5% to 1%

While most surcharges will fit within these rates, the ACCC website also notes: "different businesses have different costs of acceptance. In general, smaller merchants' costs might be higher than these indicative figures."

Card costs when you pay for a taxi: Why they may be different

The ACCC regulations around surcharges don't apply to taxi services, as the industry has its own state and territory regulators.

The surcharge applied when you use your credit card to pay for a taxi varies from state to state and can be as much as 10% of your fare price. But authorities in Victoria, NSW, WA, SA and the ACT have limited taxi surcharges to no more than 5% of the fare price.

Payments that attract a surcharge

While credit cards often attract a surcharge, businesses can choose to apply this fee to a range of different payment methods including:

  • American Express (credit card and prepaid)
  • Mastercard (credit card, debit card and prepaid)
  • Visa (credit card, debit card and prepaid)
  • Eftpos (debit and prepaid)

Some businesses also apply a fee for other payment options, such as BPAY or PayPal. For example, both Qantas and Virgin Australia apply a fee when you pay for a flight with a credit card, debit card or PayPal.

Keep in mind: You could pay a surcharge for spending with everyday businesses, as well as utility companies and even government bodies. For example, paying the the Australian Taxation Office (ATO) with a card attracts a fee based on the type of card you use and the amount you pay.

How to avoid surcharges

While there are some instances where you have no option in paying a credit card surcharge, here are some ways you can avoid or reduce how much you pay in surcharges over time.

  • Look for a surcharge notice before you pay. Any business that includes a surcharge must let customers know before they pay. If you're in a store, you should see signs before you get to the register. If you're shopping online, this cost will be added before you go through the payment process.
  • Use a debit card. Under the latest surcharge laws, debit card payments will typically attract a lower fee than credit cards.
  • Consider other businesses. In some cases, you may be able to shop around to find a business that charges reduced or no credit card fees. For example, some taxi companies charge as much as 10% for credit card payments, while Uber doesn't apply any credit card surcharge and even allows you to link your card through the app for faster payment.
  • Link your card to PayPal. You can link your credit card account to PayPal and then use your PayPal account to make payments if the merchant provides this option as a fee-free alternative.
  • Book flights with points. When booking flights with Virgin Australia and Tiger Air, you can avoid surcharge fees by booking your flight with Velocity Points rather than cash.
  • Vouchers. Some airlines and institutions don't charge fees when you use a voucher to make the purchase or booking.
  • POLi. POLi is an online payment option used by some airlines and other businesses when you shop online. If you have Internet banking enabled on your credit card, you can choose to pay through POLi to avoid a credit card surcharge. Just keep in mind that a POLi payment from a credit card could be processed as a cash advance transaction and attract additional fees from your card provider.

If you think you've paid a surcharge that was too high, or you weren't notified of the surcharge before you made a payment, contact the ACCC on 1300 302 502.

Frequently asked questions

Images: Getty

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18 Responses

  1. Default Gravatar
    MichaelNovember 17, 2018

    Can I avoid fees if I buy an airline ticket using Bpay?

    • Avatarfinder Customer Care
      JhezNovember 30, 2018Staff

      Hello Michael,

      Thank you for your comment.

      In some instances, paying via BPAY can allow you to avoid additional fees when booking flights. Kindly check the details and get ideas on how to minimise credit card booking fees for flights.

      Should you wish to have real-time answers to your questions, try our chatbox on the lower right corner of our page.


  2. Default Gravatar
    timochi89October 12, 2018


    This article advises that a fee-free payment option needs to be available. I have childcare fees where they charge a fee via all modes and only allow us to pay via Ezi-Debit (who is charging the fee). In your experience is there any way to avoid Ezi-Debit fees and/or should the child care be offering a surcharge free payment mode? They do not accept cash and advise this is the only way to pay (using Ezi-Debit)

    • Avatarfinder Customer Care
      JoshuaOctober 17, 2018Staff

      Hi Timochi89,

      Thanks for getting in touch with Finder. I hope all is well with you. :)

      Ezidebit does charge a fee every time you use their service. There’s not much you can do about it if this is the only way you can pay for your childcare fee. Ezidebit passes the surcharge of your transaction to you to minimize their loss. Thankfully, the Australian government regulates most surcharges. If you feel like the charge is too much, then you may contact the ACCC on 1300 302 502.

      If it is possible, you may also ask your childcare fee recipient if they can offer other payment methods to lessen the burden on your part.

      I hope this helps. Should you have further questions, please don’t hesitate to reach out again.

      Have a wonderful day!


  3. Default Gravatar
    MicheleDecember 9, 2016

    Hi I paid my rent with my credit card at Peard estate agents they charged 2.5% extra I used a HSBC visa credit card are they allowed to do this with the new laws??

    • Avatarfinder Customer Care
      MayDecember 9, 2016Staff

      Hi Michele,

      Thanks for your question.

      Usually, merchants that accept credit card payments apply surcharges to your transaction. Depending on the card you use and the type of transaction, surcharges range from 0.5% to 3% or more of the total transaction cost. Although this is allowed, merchants should only charge that is at “reasonable cost”.


  4. Default Gravatar
    MargaretSeptember 9, 2016

    I am wondering why do car sales still get to charge surcharge for credit card payments or will they be under the new laws too? An extra $1000 on a $40000 car seems unfair and a little rich at 2.5% surcharge…will they look into regulating the car industry as well?…. I was charged $19.53 for vehicle inspection when vic roads requires them by law to do this prior to registering any vehicle & $10 for online vic roads reg fee, I didn’t choose for them to do it online.

    • Avatarfinder Customer Care
      ArraSeptember 21, 2016Staff

      Hi Margaret,

      I’m so sorry to hear that.

      The RBA’s 2016 surcharge reforms only intend to minimise excessive credit card surcharges, not eliminate the fees. Merchants applying a surcharge will now be using a percentage rather than a fixed dollar amount, which leads to more affordable surcharges, particularly for lower-value transactions. You might want to read more about the fixed-dollar ban through our RBA and surcharge guide.

      Also, if you think you have been excessively charged from the transactions you mentioned earlier, it would be best to discuss the matter directly with the provider of that product or service.

      I hope this has helped.


  5. Default Gravatar
    HamishMay 3, 2016

    if i pay for a new car on AMEX, what is considered a fair merchant card fee %?
    Visa I know will be around .8% on a 35K purchase.

    • Avatarfinder Customer Care
      MayMay 4, 2016Staff

      Hi Hamish,

      Thanks for your inquiry.

      Apparently, American Express charges fees that are higher than Visa or MasterCard. As for AMEX Merchant Service fee, it’s subject to change at any time and it depends on the type of industry where the business belongs. You’d be best if you could directly inquire with AMEX the exact merchant service rate on car purchases. For your convenience, I’ve sent AMEX’s number to your email.


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