Credit Card Surcharges

It's 2021 and we shouldn't still be stung for paying with a credit card. But if there is a surcharge, here are your options.

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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.

You can use this guide to learn when a credit card surcharge will apply in Australia, how much you could pay and how to avoid the cost.

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

A credit card surcharge is a type of payment surcharge that merchants can apply to your credit card transactions, on top of the advertised purchase price. This surcharge helps them cover the cost of accepting credit cards as a payment method. Some businesses also add a surcharge for debit cards and other types of payments that cost them money.

For example, a cafe that accepts credit cards will be charged a fee by its bank for processing the payment of your latte. Depending on the card, this fee can range from 0.5% to 2% of the total transaction cost. Businesses can choose to offset the cost of this fee through their pricing, or by applying a surcharge.

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.

It’s important to note that any business that includes a surcharge must let customers know before they pay. If the only payment option available requires a surcharge, the surcharge should be included as part of the original quoted price rather than added afterwards.

Credit card surcharge reforms

In 2016, the Australian government introduced an excessive surcharge ban to make sure customers weren't paying more than what it cost to process the payment: the Competition and Consumer Amendment (Payment Surcharges) Act 2016.

This ban applies to payments made by EFTPOS, Visa, Mastercard and American Express "companion cards" (Amex cards that used to be issued by some banks). It does not technically apply to American Express cards directly issued by American Express, as well as Diners Club, BPAY, PayPal, UnionPay, cheques or cash.

How much is a credit card surcharge?

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%

Keep in mind that is is just a guide. As the ACCC website notes: "different businesses have different costs of acceptance. In general, smaller merchants' costs might be higher than these indicative figures."

To give you an idea of surcharge costs and the impact of the surcharge reforms, you can compare the surcharges that applied before and after 1 September 2016 below.

Booking flights

Prior to the RBA flat-rate surcharge ban, airlines were renowned for charging exorbitant credit card booking fees. There was previously a flat rate per flight and per person, but on 1 September 2016, a percentage-based surcharge system was introduced across the four major Australian airlines.

Credit card surcharges before 1 September 2016

AirlineBooking and service fee* – Domestic flightsBooking and service fee* – International flights
Virgin$7.70Between $10 and $30
Jetstar$8.50Between $8.50 and $12.50

*The booking and service is fee is charged per person, per flight booked.

Credit card surcharges after 1 September 2016

Qantasqantas logo

Bookings made in Australia (per ticket, per cardCredit card feesDebit and prepaid Mastercard feesDebit and prepaid Visa card feesPayPalFee cap (per ticket, per card)
Australian Domestic and Trans-Tasman1.04%0.34%0.45%0.69%$22

Virgin Australiavirgin australia logo

Flight type Credit DebitFee cap
Domestic and trans-Tasman1.024%0.410%$11.00
International short and long haul0.996%0.422%$70.00

Jetstar Airways jetstar logo

Card typeFee
Credit or charge card0.99%
Debit or prepaid Mastercard0.25%
Debit or prepaid Visa0.41%
AliPay or WeChat1.5%

Paying for a taxi

The excessive surcharge ban doesn't apply to taxi services, as the industry is regulated by 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.

The good news is that authorities in Victoria, NSW, WA, SA and the ACT have limited taxi surcharges to no more than 5% of the fare price.

Credit card surcharges for in-store or online purchase

As of 1 September 2016, the surcharges you’ll pay for credit card purchases in-store or online will be limited to the cost of accepting each payment method. In general, this will be between 1% and 3% of the total transaction cost.

Brick-and-mortar or online store that apply a credit card surcharge should clearly notify you before you make payment. For example, there should be signs at the checkout in-store or information on the website to notify you of any surcharges before you pay.

Other places you may have to pay surcharges

  • Ticket machines. You could have to pay a surcharge when you use your card to pay for parking at a ticket machine.
  • Events. Paying for event or concert tickets might require that you pay a surcharge. It’s important to note that surcharge regulations do not affect the “booking fees” that are applied regardless of the payment method used. The ACCC says there are no regulations to stop merchants from applying these fees, but they still need to be included in the advertised total price before a purchase is made in order to comply with Australian Consumer Law.
  • Utilities. Payments towards utilities and other bills can also attract surcharges.
  • Government payments. Payments to government bodies may also attract a credit card surcharge. For example, the Australian Taxation Office (ATO) applies a card fee based on the amount you pay and now says the fee will be based on the amount paid and the card used, and is “equal to the fee we incur from our banker”.
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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.

  • POLi. POLi, a wholly-owned subsidiary of Australia Post, is one of the country’s leading real-time, online payment methods. With Internet banking enabled on your credit card, you can choose to pay through POLi for airline tickets and more, and you don’t have to pay any surcharge when you use this payment method. POLi transactions from a credit card could also be considered “cash advance transactions” and may attract additional fees as a result. Check to make sure your card provider allows this payment option from a credit account.
  • 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 merchant 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.
  • Booking 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.

Frequently asked questions

The cost of a surcharge depends on the business, the cost of the transaction and the type of card you use. By taking note of when surcharges are applied, using alternative payment options or shopping around for a more affordable product or service, you can avoid paying or reduce the cost of credit card surcharges.

Images: Airline companies and Getty

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18 Responses

    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.


    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!


    Default Gravatar
    JulieDecember 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”.


    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.


    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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