Credit Card Purchase

I recently made a purchase with my credit card with a local small business. When I received my statement, there was an additional 5% added to the charge. I called the business and was told that they have to add the 5% because their bank charges them that % for processing the merchant charge. Can they legally do this?? I have made several inquires around and was told this is called "whiplashing" by the banks and that is is illegal. Please help!

I am a law school graduate. What I offer is mere information, not to be construed as forming an attorney client relationship.

Sometimes merchants give discounts to customers when they pay in cash. If they pay with a credit card, merchants must inform their customers that they will add tax to it.

Now, even if you use a credit card, there cannot be a 5% charge added on top of that. That charge covers the business's cost? No way. They are to eat that fee or hike up their prices, but they cannot get it directly from you.

Contest the charge and contact the better business bureau in their county.