Legal — capped at 2%
Colorado repealed its surcharge ban in 2021 but capped surcharges at 2% of the transaction (or actual cost if lower) — below the 3% network cap. Notice must be posted at point of entry or point of sale.
Colorado at a glance
| Credit card surcharge | Legal — capped at 2% |
|---|---|
| Maximum surcharge | 2% (state cap — lower than network cap) |
| Debit & prepaid cards | Never — prohibited nationwide by federal rules and card networks, in every state |
| Cash discount / dual pricing | Legal — permitted in all 50 states with a compliant structure |
| State rule | Surcharge permitted up to 2% with posted notice (Colo. SB21-091 (2021)) |
| Disclosure | Notice must be posted at the point of entry or point of sale. Standard network rules also apply: separate receipt line item, credit only, 30-day processor notice. |
What Colorado merchants need to know
Colorado legalized surcharging in 2021 (SB21-091) but wrote its own cap into the law: 2% of the transaction, or your actual cost of acceptance if that's lower. That's a full point below the card networks' 3% practical cap, and it's the detail that trips up multi-state operators — a 3% or 3.5% surcharge program that's compliant in Kansas or the Carolinas is illegal in Colorado.
The math matters here. Most merchants' true effective rate runs between 2.3% and 3.2% depending on card mix. In Colorado, anything above 2% comes out of your pocket regardless — so a CO surcharge program recovers most, but not all, of your processing cost. Some Colorado merchants decide the partial recovery is still worth it; others conclude that if they're absorbing part of the fee anyway, a cash discount structure or a straightforward rate review gets them further.
The cash discount alternative
Wherever surcharge rules get complicated, dual pricing doesn't: posting a card price and offering a discount for cash is legal in all 50 states when it's structured correctly — the posted price must be the card price, with cash receiving a true discount. The economics match a surcharge; the compliance profile usually beats it.
Colorado's 2% cap means a surcharge can't fully cover a typical 2.5–3% effective rate — one reason CO merchants often pair a modest program with an actual rate review, or use dual pricing where the posted card price reflects true cost.
Common questions
Is it legal to charge a credit card fee in Colorado?
Can I charge 3% in Colorado like in other states?
Does a 2% surcharge cover my processing costs in Colorado?
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Surcharge rules in other states
Not legal advice. Surcharge and pricing laws change through legislation, court decisions, and enforcement positions. This page reflects our review as of July 2026 and is provided for general information. Confirm current requirements with your processor and qualified counsel before implementing any fee or dual-pricing program.