Why aren’t all credit cards accepted everywhere?

Curtis Arnold
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Curtis Arnold
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The number of merchants accepting credit cards seems to have grown significantly over the past few decades. In fact, according to ClearlyPayments.com, roughly 11.7 million U.S. businesses accept cards.

Growth has been particularly strong among small businesses. American Express, for example, launched Small Business Saturday in 2010, which has been wildly successful in promoting small business awareness and card acceptance. I’m continually amazed at the number of mom-and-pop shops that I encounter that accept plastic these days.

While increased card acceptance is certainly welcome news if you’re a cardholder, consumers should also be aware that a significant number of merchants only take certain types of credit cards. This may not sound like a big deal, but can present real challenges if you discover while checking out at your favorite retailer that they only accept Visa cards and you have every other form of plastic in your wallet or purse. The end result can be embarrassing and frustrating.

While you may think these situations are isolated, you should think again. Costco, for example, which is second largest retailer in the world according to Statista.com (behind only Walmart) only accepts Visa cards. I personally learned this the hard way after shopping for a few items at my local Costco and then discovering that my go-to CardName, which is issued by Mastercard, was useless. Citi is a CardRatings advertiser.


Key takeaways

  • Better understand the four major card networks and why some businesses don’t accept certain types of plastic.
  • Learn how to avoid frustration and embarrassment while checking out if your card isn’t accepted.

I hope these “insider tips” will help you to not only avoid a negative experience while shopping, but also empower you to shop confidently.

What are the major credit card payment networks/processors?

Credit card processing can be confusing, particularly if you haven’t been a cardholder very long. There are many card issuers, which are the financial institutions, typically banks or credit unions, that approve your application for credit and issue your card. Citibank and Chase are examples.

However, there are only four major card networks, also known as processors. My colleague Maryalene Laponsie succinctly defines card networks by explaining that they essentially serve as the go-between for the merchant/business accepting your card and your card issuer. In a nutshell, “they make it possible for information gathered from your card at the cash register to be transmitted to your card issuer,” she says.

The four major (there are smaller processors but they don’t have much market share) payment processors, which have great brand awareness, are:

  • Visa
  • Mastercard
  • Discover
  • American Express

In short, your card will likely have the one of these four brands prominently displayed on it regardless of which financial institution issues your card.


To make matters even more confusing, American Express and Discover also issue their own branded credit cards. Visa and Mastercard, on the other hand, issue all of their cards through various financial institutions. So, if you have an American Express card and need customer service, you will need to call American Express directly (number on the back of your card).

How widely accepted is Visa, Mastercard, Discover and American Express?

In the past, Visa and Mastercard have been significantly more widely accepted than Discover and American Express. However, this isn’t so much the case anymore.

Lynnette Khalfani-Cox, author of the New York Times bestseller “Zero Debt: The Ultimate Guide to Financial Freedom” and affectionately known as the Money Coach, explains that “it is true that historically way fewer merchants took American Express and Discover, and that was primarily due to their higher merchant fees. But these days, there’s not a huge gap in the number of retailers that take Amex and Discover versus Visa and Mastercard.”

In fact, American Express and Discover blast that they are now accepted at about 99% of all retailers that accept cards in the U.S., putting them on par with Visa and Mastercard. Costco is the one glaring exception.

Despite the growth, Khalfani-Cox notes that small retailers, mom-and-pop shops, and some gas stations still do not accept credit cards, or they may only accept Visa and Mastercard.

Michael Bovee, founder of the Consumer Recovery Network, adds that “small retailers and service providers are one of the likelier places you will find plastic is not an option. There are also some industries that lack access to normal banking infrastructure, such as those states that allow medical or recreational marijuana stores to operate.”


Some stores may temporarily stop accepting certain forms of payment. For example, grocery chain giant Kroger decided to stop accepting Visa credit cards at its subsidiaries Foods Co. and Smith’s Food and Drug for about a year. Kroger’s goal was to pressure Visa into lowering its card processing fees. The ban was lifted in October of 2019.

Why aren’t all credit cards (Visa, Mastercard, Discover and American Express) accepted everywhere?

As has been briefly alluded to, the short answer regarding why some merchants don’t accept certain types of cards is mostly due to merchant fees. While it’s not necessary that the average consumer understand the dynamics of these fees, a short explanation may be helpful.

Khalfani-Cox opines that “the reason all cards aren’t accepted everywhere mostly boils down to the transactional fees charged by different card networks — fees that cut into a business’s profits. So if a business or a merchant thinks a card transaction (or merchant) fee is too high, they won’t accept that card.”

Merchant fees are simply the fees that a particular business pays to accept your card. This fee is generally 2-4% of your total purchase price.

Khalfani-Cox adds that “Amex and Discover have come down on their fees a lot, but they’re still higher. So that’s why a number of small businesses — such as restaurants that have razor-thin profit margins — choose to stick with Visa and Mastercard.”

Fees can get complicated. Case in point, reward credit cards, which are very popular among cardholders, are often associated with higher fees than non-reward cards. This is particularly true among premium reward cards.

In fact, the Federal Reserve published data in 2022 showing that the cost of rewards, as a share of total transaction volume on credit cards, increased 25% from 2015 through 2021.

Finally, other business factors may come into play as well. According to Khalfani-Cox, some businesses “may have certain perceptions about potential card fraud, or may simply prefer to take cash only” for whatever reason.


You might be wondering why Costco only accepts Visa. If you guessed due to merchant fees, you guessed right! Visa is reportedly giving Costco a huge discount on its processing fees- to less than 0.4% compared to the normal 2%+ range. Moreover, Costco has its own Visa reward card called the CardName.

What should you do if your card isn’t accepted by a particular merchant?

There are many horror stories of consumers trying to make a purchase somewhere, only to get to the cash register and find out at the last second that that business doesn’t accept their card for some reason. The question is, how can you best avoid such frustrating situations?

One potential solution according to Khalfani-Cox is to “always carry a second card as a backup, and even better, if you’re going to shop somewhere you haven’t been before or where you have any questions about the form of payment accepted, it’s best to ask upfront.”

Bovee also offers another good tip by adding that “having a Visa or Mastercard is sometimes necessary. As mentioned, there are still places that do not take an Amex or Discover (card). Costco is a perfect example of this.”

Carrying cash and/or a debit card is also a good idea. Donna Freedman, author and longtime personal finance journalist, suggests that you always carry “cash, a debit card, gift card or back-up credit card.” She knows from personal experience the benefit of having a second option:

“Once I was taking someone out to lunch and had my card declined. This was pretty embarrassing, but I pivoted to a second card. I called when I got home and learned the first card had been canceled due to suspicious activity. Sure would have been nice to know that before I took someone out to lunch! But having the second card saved me.

“Another time, I was out of the country and my card issuer contacted me to see if I’d just tried to buy a bunch of lawnmowers in Florida. Um, no. They promptly canceled that card, too — which could have left me in a world of hurt had it been my only plastic. Fortunately, I had a second card and I did just fine.

“I’d also suggest having at least some cash, since a power failure or other problem could prevent your card from being accepted. Once I went into a Wendy’s restaurant and was told it was cash-only that day. A nearby construction project had accidentally cut the Internet, so they couldn’t process any plastic.”


An increasing number of small businesses, particularly restaurants, are starting to charge a small fee if you want to pay with plastic. See my recent article entitled “What is a credit card surcharge and how can it be avoided?” for advice on how to minimize and/or avoid such fees.

Curtis Arnold
CardRatings Founder

Curtis founded Cardratings.com in 1998 and, in so doing, helped pioneer the concept of rating credit cards. He has been a nationally recognized expert in consumer credit for well over 20 years. He is the author of “How You Can Profit from Credit Cards: Using...Read more

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