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Updated: Aug 03, 2023

What Are Credit Card Convenience Fees and How Can You Avoid Them?

Learn about credit card convenience fees and when and where you are most likely to encounter them. Find out how you can avoid them.
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If you’re trying to maximize your credit card rewards, you might have tried to pay your monthly rent or utility bill to rack up points or miles.

But when you got to the final payment screen, you likely stopped short when you saw that they don’t accept credit cards, or they do and they tacked a fee onto the transaction.

This is what’s called a credit card convenience fee, and many merchants charge it. In some cases, it may be worth paying the fee, but most of the time it’s not.

Learn more about credit card convenience fees and when it’s worth paying one.

What is a Credit Card Convenience Fee?

A convenience fee is a charge that some merchants assess for transactions where credit cards are not a standard payment method.

For example, you may be charged a convenience fee by the following billers:

  • Landlords or property management companies
  • Utility companies
  • Tax payment services
  • University tuition offices
  • Peer-to-peer payment services

Also, you may be charged a convenience fee if you’re making a payment through a nonstandard payment channel. If you buy movie tickets online, for instance, rather than at the theater, you may be charged a convenience fee.

The same goes for some businesses that prefer online payments but will process a payment over the phone for a small fee.

In either of these cases, you may be charged a convenience fee whether you use a credit card or a debit card.

Businesses charge convenience fees to help cover their costs. When you use a credit card, a business has to pay merchant fees to the payment network.

If a business accepts credit cards as a primary payment method, those fees are included in their cost of doing business. In many cases, business owners simply factor the merchant fees into the prices of their goods or services.

In cases where a business primarily takes other payment methods, however, they charge a convenience fee. This fee makes up for the merchant fees so the business doesn’t have to increase prices for everyone.

Convenience Fees vs. Surcharges

Convenience fees and surcharges are often used interchangeably. But there’s one key difference between the two.

Where legal, merchants can assess a surcharge of up to 4% just for the privilege of using a credit card. It doesn’t matter whether it’s a standard payment method or channel.

That said, 10 states have partially or fully banned credit card surcharges. Those states include California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas.

In some of these states, the courts have determined that surcharge bans violate the First Amendment rights of business owners. A federal appeals court ruled in January 2018 that California cannot prohibit credit card surcharges.

And in Florida, a federal appeals court struck down the state’s law banning surcharges in November 2015. The state attorney general appealed the case to the U.S. Supreme court, which declined to hear it in 2017, but the law is currently still active.

Where surcharges are allowed, merchants are typically required to disclose them up front. It’s also important to note that surcharges are not the same as discounts that merchants may offer to cash or debit card users.

These discounts are common among small service businesses, such as auto shops and home contractors. Health care providers may also offer discounts to their patients who choose cash over credit.

In the case of these discounts, merchants are not required to tell you whether you would save money by using a different payment method. So it’s important to ask in those situations what your potential savings might be.

Are Credit Card Convenience Fees Legal?

There are no specific laws that prohibit credit card convenience fees. But the four major payment networks have agreements with merchants that accept their cards. And those agreements include some restrictions for convenience fees.

Here’s a quick summary of each:


Merchants can only charge the fee if it’s a legitimate convenience through an alternative payment channel. For example, by mail, over the phone or online.

Merchants can’t charge a convenience fee solely for the use of a Visa credit card.


Only pre-certified government agencies and educational institutions are allowed to charge convenience fees. Eligible merchants can charge the fee regardless of whether the cardholder pays in person, by mail, over the phone or online.

Merchants can’t use convenience fees to discriminate against Mastercard credit card holders.

American Express

Government agencies, educational institutions, utility companies and rental establishments can charge convenience fees.

However, those fees cannot be higher than what the merchant charges for other payment networks.


There are no set restrictions regarding convenience fees.

That said, Discover does require merchants to charge a convenience fee only if it charges the same fee to cards on other payment networks.

When is it Worth Paying a Credit Card Convenience Fee?

It may sound counterintuitive to pay a fee just for the privilege of using your credit card. That’s especially the case if you can avoid the fee by using a different payment method or going through a different payment channel.

But there are some situations in which it might be worth it. Specifically, when the rewards rate you earn on your credit card is higher than the fee percentage. It may also make sense if you’re working toward a sign-up bonus.

Some convenience fees are expressed as a flat dollar amount, however, rather than a percentage. So you may need to do some math.

Convenience Fees as a Percentage

One example of when it’s a good idea to pay a convenience fee is if you’re paying taxes.

The IRS partners with three payment processing services to allow taxpayers to make payments. Each charges a convenience fee for credit card users:

  • 1.87% fee
  • 1.97% fee
  • 1.99% fee

Now, let’s say you have a card that offers 1.5% cash back on all your purchases. Since the convenience fee is higher than the card’s rewards rate, you’ll lose money on the transaction, even with the cash back you earn.

If, however, you’re using a different credit card that offers an effective 2% cash back on every purchase, you’ll make money on the transaction.

For example, let’s say you’re making an estimated tax payment of $3,000. If you go through, your convenience fee will be $56.10, and you’d earn $61.12 in cash back.

While that $5 profit isn’t a lot, you’re still coming out ahead on the transaction.

Convenience Fees as a Flat Rate

Now, let’s say you’re paying rent and your landlord charges a flat convenience fee of $35 if you want to use a credit card. In this situation, you’ll want to divide the fee by your credit card’s rewards rate.

For a card that offers 1.5% cash back, your rent payment would need to be higher than $2,333 for you to earn money on the transaction. If you have a card with a 2% rewards rate, that payment threshold would go down to $1,750.

Sign-Up Bonuses

Credit cards that offer sign-up bonuses typically require that you spend a certain amount of money within the first few months to get it.

A premium travel credit card, for instance, might offer 50,000 miles after you spend $3,000 in the first three months. That’s great if you can afford that amount with your regular spending.

But if you can’t, you could use a service that charges a convenience fee to make up the difference.

Let’s say, for example, that you’re $500 short on meeting the minimum spend and you have just a few days left to achieve your goal.

If you send a family member or friend $500 on Venmo, which charges a 3% convenience fee for credit cards, you’ll pay $15 in fees. But doing so will ensure that you get the card’s sign-up bonus, which is worth $500.

Again, it’s ideal if you can meet the minimum spending requirement with your regular spending. But walking away with $485 in rewards is a lot better than walking away with nothing.

The Bottom Line

Credit card convenience fees aren’t common with most businesses and retailers. But in some cases, you may need to decide if it’s worth to pay one.

In the cases of rent and utility payments, the convenience fee is often higher than what you’d get back in rewards. So it typically doesn’t make sense to make these payments using a credit card.

But it’s always a good idea to run the numbers, either in your head or using a calculator, before deciding whether to avoid a convenience fee.

The idea of paying a fee just for using a credit card may seem like a bad idea, especially if you’re generally fee-averse. But if you can manage to come out of the transaction with more value in rewards than what you paid in fees, it’s worth it.