Retailers in 40 US states can now charge up to four percent extra when consumers pay for goods and services with a credit card. The new service fees would potentially cover the merchant's cost of processing the credit card. The fees are not applicable in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma and Texas, as they are in violation of respective state laws.

It is up to individual businesses to decide whether or not to add the fee, but they must disclose it to consumers at the point of purchase. Debit cards are exempt from the surcharge.

The new additional cost is part of a legal settlement agreement resulting from the alleged fee-fixing conspiracy which was carried out by the larger credit card companies and financial institutions operating in the US. The credit card companies and banks also agreed to pay $6 billion to the merchants who took civil action against them.