Skip to content

Hilton hotel adds surcharge for using a credit card — Will this become a trend?

July 11, 2021
4 min read
Hilton hotel adds surcharge for using a credit card — Will this become a trend?
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Editor's Note

After publication of this story, Hilton updated its statement to TPG to say that "Credit card surcharges are not aligned with Hilton’s enterprise brand standards. We are addressing this particular situation with the independently owned and operated property in question."

Editor's note: After publication of this story, Hilton updated its statement to TPG to say that "Credit card surcharges are not aligned with Hilton’s enterprise brand standards. We are addressing this particular situation with the independently owned and operated property in question."


A funny thing happened to TPG readers Isaac Burgin and Kendra Wallace during recent stays at the Hilton Burlington Lake Champlain in Vermont: Both were charged a "credit card surcharge tax" every time they swiped their cards to pay for hotel charges.

The surcharge tax was particularly galling to Wallace, who has Hilton Diamond elite status -- and paid the hotel bill with her Hilton Honors American Express Card. As you can see below, she was charged 32 cents, $1.99 and 19 cents during her overnight stay.

Sign up for our daily newsletter
(Screenshot courtesy of Kendra Wallace)

Burgin stayed at the property June 24 - 26 and had surcharges tacked onto his bill. When he raised the issue of the surcharge with the hotel, he was told that "they were justifying it as a cost recovery while calling it a tax," which he felt might not be appropriate or legal. "I then filed a complaint with Hilton's corporate office," he said. "I did receive a call from the hotel, again trying to justify the fee. After a long, unpleasant conversation, they did promise to waive the fee -- while insisting they had every right to do so. I found this appalling and a poor business practice. which I conveyed to both the hotel and Hilton."

In a statement to TPG, a Hilton spokesperson said “Hilton properties must adhere to brand standards pertaining to fees charged to the customer and clearly disclose any charges to a customer before being incurred. Hilton may grant exceptions in some cases to those standards, for example in regions where it is customary for such fees to be charged across all industries. In all cases, when charging such fees, Hilton hotels must comply with state and local laws. We are reviewing this specific instance with the independently owned and operated hotel.”

(Photo by Getty Images)

These types of surcharges, hidden fees and resort fees have long been anathema for TPG, which has written extensively about these practices. We've noticed more businesses tacking on credit card surcharges and in the COVID-19 era, a pandemic recovery fee. These fees and surcharges are being used as businesses make a grab for additional revenue to make up for pandemic-related losses.

Related: You may have to pay a surcharge to use your credit card — here’s what to know

Card issuers including American Express, Mastercard and Visa charge merchants a fee every time a customer uses their credit card to pay for goods and services. They add up to around 1.3%-3.5% of a total transaction. Back in March 2021, Visa and Mastercard announced that they would delay increasing merchant fees for another year due to the ongoing effects of the pandemic, Bloomberg reported. Despite this change, more businesses have tacked on these fees as they continue to recover from the effects of the COVID-19 pandemic.

There are only four states and one territory -- Colorado, Kansas, Massachusetts, Connecticut and Puerto Rico -- that explicitly make it illegal to impose an extra fee for using a credit card.

Visa requires all businesses that impose a card surcharge to give consumers written notice of it at least 30 days in advance. All of the card networks cap surcharges at 4% of the transaction -- meaning that merchants can’t use surcharges for profit. Instead, they can only recoup baseline costs.

Related: Credit card economics: A look at the fees that you rarely see

It's perfectly understandable that struggling businesses feel the need to pass on additional costs that they are also faced with. But at the same time, these questionable surcharges can also hurt sales and leave a bad impression on consumers like Wallace and Burgin. It has become normal to see city and state taxes, along with marketing fees -- and those annoying resort fees -- on a hotel bill. But slipping in an undisclosed surcharge for using a credit card, especially as many hotels have gone to cashless operations, seems to be a practice that's penny wise and pound foolish. It's not good business to antagonize the customers you need to keep the doors open.

Featured image by Shutterstock
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

TPG featured card

Best starter travel card
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards

1 - 3X points
3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
1XEarn 1 Point per $1 spent on all other purchases

Intro offer

Earn 80,000 ThankYou® points60,000 points
For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

Annual Fee

$95

Recommended Credit

670-850
Excellent, Good
Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

Pros

  • Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
  • $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

Cons

  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases
Best starter travel card
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
1XEarn 1 Point per $1 spent on all other purchases
  • Intro Offer
    For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

    Earn 80,000 ThankYou® points
    60,000 points
  • Annual Fee

    $95
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Excellent, Good

Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

Pros

  • Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
  • $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

Cons

  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases