Why Are Restaurants Charging Credit Card Fees?

Every wonder why are some restaurants charging credit card fees, while others do not? We explain what’s going on behind the scenes 

Updated April 2024
Fact checked by Cathy Gresham
restaurant credit card fees featured image

I love to eat at restaurants. Probably too much. ?

My wife and I probably dine out at least twice a week and order takeout at least once more.

So I know it can be frustrating when you go to pay and a restaurant hits you with an additional credit card surcharge, just for wanting to use your credit card to pay, instead of cash. ?

That’s why it pains me to see customers frustrated and confused when they are charged an extra fee for paying with their credit card at a restaurant.

In this article, I’ll explain the reasons why restaurants charge credit card fees, the impact of these fees on customers and businesses, and how restaurants can mitigate these fees. 

We will look at it from both the customers’ and restaurants’ perspectives. 

The Rise of Credit Card Payments in Restaurants

Credit card payments have become increasingly popular in restaurants over the years due to their convenience and security. Customers can easily pay their bills with a credit card without having to carry cash or worry about the safety of their payments. For restaurants, accepting credit card payments means quicker transactions, reduced risk of fraud, and increased revenue. In fact, according to a study by the National Restaurant Association, over 80% of restaurant customers use credit cards to pay their bills.

Credit Card Fees and How They Work

When a customer pays with a credit card, the restaurant is charged a fee by the credit card company for processing the transaction. These fees, also known as interchange fees, vary depending on the type of card used and can range from 1.5% to 3% of the transaction amount. Most often, they’re about 2%.

In addition to interchange fees, restaurants may also be charged processing fees by their payment processor, which can range from a few cents to a few dollars per transaction. Typically, though they’re about 30 cents per transaction. 

While this doesn’t seem like much, it can really add up when you’re running a business like a restaurant, which are famous for their razor-thin margins. 

The Impact of Credit Card Fees on Restaurants and Customers

While credit card fees may seem like a minor inconvenience to customers, they can have a significant impact on both customers and restaurants. For restaurants, credit card fees can add up quickly and eat into their profit margins. This can be especially challenging for small businesses that operate on tight budgets.

For customers, credit card fees can add an unexpected cost to their dining experience, which can be frustrating and make them feel like they are being taken advantage of.

Alternative Payment Options for Customers and Restaurants

To avoid credit card fees, some customers may choose to pay with cash or a debit card instead of a credit card. However, not all customers carry cash or want to use a debit card for their transactions. In addition, some customers may not be aware that they will be charged a credit card fee until they receive their bill.

To mitigate the impact of credit card fees on customers, restaurants can offer alternative payment options, such as debit cards, cash, or check options, that are often processed at a lower cost.

Restaurants can also be transparent about their credit card fees and notify customers of the surcharge before they make their payment.

How Restaurants Can Mitigate Credit Card Fees

To minimize credit card fees, restaurants can negotiate lower interchange fees with their payment processor or switch to a different processor with lower fees. They can also choose to pass on the cost of credit card fees to customers only when they use a credit card and not for other payment methods. In addition, some restaurants may choose to implement a minimum spend for credit card transactions to ensure that the fees don’t eat into their profit margins.

Lastly, instead of adding a credit card surcharge, restaurants might consider offering a discount for using other payment methods instead. Customers generally look upon this more favorably.

average credit card fee at restaurants is 2.5%

Why Restaurants Charge Credit Card Fees

Some restaurants choose to pass on these fees to their customers in the form of a credit card surcharge. While this may seem unfair to customers, it’s important to understand that restaurants operate on thin profit margins, and every penny counts.

By charging a credit card surcharge, restaurants can offset the cost of accepting credit card payments and avoid having to increase menu prices.

In addition, some restaurants may also be subject to minimum transaction fees or monthly fees from their payment processor, which can add up quickly.

Not all states allow credit card surcharges at restaurants

A Critical Point To Understand As A Customer

You’re paying for these credit card fees either way. 

While you typically don’t see these fees every day, the restaurant certainly does. So, most restaurants simply bake it into their prices. 

So, you’re still paying for these fees, whether they bake it into the overall price, or break it out as a surcharge. 

Unfortunately, these credit card fees have become a fact of life for nearly every transaction we do. This is why we try to run nearly every transaction we do with a high, flat cash-back rate card

In my opinion, it is important to understand both sides of the situation. As customers, we want to know what we are paying for and how much we are paying. On the other hand, restaurant owners have to make tough decisions about how to run their business and what costs to pass on to customers.

It’s understandable that some restaurants feel the need to charge credit card fees to offset the costs of credit card processing, but it can still be frustrating for customers who may not be aware of these fees. As a customer, I appreciate transparency and understanding the reasoning behind any additional fees that are charged. As a business owner, I understand the importance of balancing costs and providing a high-quality experience for customers.

Moving forward, it will be interesting to see how the restaurant industry continues to evolve in the face of changing payment technologies and consumer preferences. Regardless of the specific policies that restaurants adopt, clear communication and transparency will be key to ensuring that customers feel valued and respected.


  • National Restaurant Association
  • Consumer Financial Protection Bureau 

Editor's Note:

At Personal Finance Guru, we want to help you maximize your lifestyle through personal finance. You can trust the integrity of our independent financial advice. Our opinions are our own and have not been provided, reviewed, approved, or endorsed by any advertiser or financial product provider. To support and grow the site, however, we may receive compensation from the issuers of some products.

Meet the author:

Cody Beecham

Cody Beecham


Cody is the founder and owner of Personal Finance Guru. His day job is as a management consultant at one of the Top 3 firms (think Mckinsey, Bain), where he advises Fortune 500 C-suite clients on their most important and pressing business problems. He completed his business education at Harvard Business School. 

After seeing the lack of personal finance education for regular people, Cody started the website with the mission to provide everyone access to information that will help them achieve their financial goals.

Cody approaches personal finance from a maximalist perspective, shunning typical advice around simply not buying a cup of coffee instead of more effective methods like investing in yourself to quickly grow your income. 

He believes in saving money and investing for the future, but he also knows that you need to enjoy life today. That’s why Cody approaches money with a sense of humor and a positive attitude. He knows that if you’re not having fun while you’re growing your wealth, then what’s the point?

Cody approaches life with the same gusto that he brings to personal finance. He loves to travel and experience new cultures, and he is an avid reader and learner. He also enjoys playing sports (especially tennis) and spending time with his family and friends.