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Frequently Asked Legal Questions

Find answers to common questions in our searchable FAQ.


51366 views   |   76   |   Last updated on Jul 21, 2022    Consumer Protection


At this time, the legal status of Texas laws on credit and debit card surcharges is unclear due to recent federal litigation. As librarians, we cannot determine whether a business is able to charge a fee for a purchase made with a credit or debit card.

Texas statutes prohibit imposing a surcharge for using a credit or debit card as payment. However, it is unclear if the Texas laws remain enforceable after a recent federal lawsuit.

With certain exceptions, surcharges for using a credit card or a debit card are prohibited by Chapter 604A of the Texas Business and Commerce Code:

Sec. 604A.002. IMPOSITION OF SURCHARGE FOR USE OF DEBIT OR STORED VALUE CARD. (a) In a sale of goods or services, a merchant may not impose a surcharge on a buyer who uses a debit or stored value card instead of cash, a check, credit card, or a similar means of payment. […]

Sec. 604A.0021. IMPOSITION OF SURCHARGE FOR USE OF CREDIT CARD. (a) In a sale of goods or services, a seller may not impose a surcharge on a buyer who uses a credit card for an extension of credit instead of cash, a check, or a similar means of payment. […]

Also note that it is possible the agreement or contract between a merchant and a credit card or payment processing company may prohibit surcharges or fees.

Cash Discounts

Some merchants offer a discounted price for paying with cash. See the definition of "surcharge" at Section 604A.001(5) for language related to discounts for cash purchases. 

2018 Federal Lawsuit

On August 16, 2018, Judge Lee Yeakel issued an order that permanently enjoined the State of Texas from enforcing parts of the law against the merchants who had sued the Attorney General. The case is Rowell v. Paxton, 336 F. Supp. 3d 724 (2018). Read the court order issued on August 16, 2018. Read the permanent injunction and final judgment also issued on August 16, 2018.  You can also find a copy of the case's docket entries on CourtListener.com or on PACER.gov.

A 2018 article aimed at landlords from the Houston Apartment Association provides context and background on the litigation.

Violations

The law describes penalties for violations, but it remains unclear if these provisions are enforceable due to a federal lawsuit.

Section 604A.003 says a person who knowingly violates the law is liable for a civil penalty up to $500 per violation. That section goes on further to state that the "attorney general or the prosecuting attorney in the county in which the violation occurs" may bring a suit to recover the civil penalty, but it is important to read the entire statute as it describes other requirements before filing suit.

The Attorney General has a consumer complaint process that you could use to report violations. Please note, though, that the Attorney General's website indicates their office will not file lawsuits on behalf of every individual consumer.

Attorney General Opinions

The Texas Attorney General has issued two opinions that address different aspects of the law in relation to surcharges:

  • Opinion No. KP-0095, a 2016 opinion on online convenience fees and third-party payment processors.
  • Opinion No. KP-0257, a 2019 opinion on whether a county contracting with a private entity for the collection of money owed to the county can charge a fee to defendants.

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