Comment by tastyfreeze

Not illegal. Card issuers required merchants that wanted to accept their cards to not have separate pricing for cash and credit card. It would have been a lot more difficult for credit cards to take over as the primary payment method if they had to convince consumers that the convenience of a card was worth paying 3-5% more on everything. Exceptions started being added for public entities, like municipalities, that wanted to accept cards.

> So non credit card users end up paying more credit card fees than credit card users which is nonsense.

The business just makes more money on cash transactions. It would be interesting to find if the cost of cash handling/losses is comparable to the card processing fees.