How to Tip With a Credit Card
6 Min Read | Published: October 3, 2024
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Tipping with a credit card is fast and easy. Learn how to tip with a card, plus see how to easily calculate and adjust tips when paying by card.
At-A-Glance
- Whether you’re dining out, getting food delivered, or receiving another service, credit cards can make tipping fast and convenient.
- When tipping by credit card, you may be able to earn credit card rewards on the tip. This will depend on what type of card you have.
- In some instances, cash tips may be a better option as credit card tips come with some implications for servers and other employees.
If you don’t have cash on hand or simply want to maximize your credit card rewards, you may decide to leave a tip with a credit card. While tipping with a card is convenient, there are a few things you should keep in mind if you go this route. In this article, we’ll look at how tipping on a credit card works and show you the step-by-step process of how to leave one.
How Does Tipping With a Credit Card Work?
Whether you’re dining out, getting food delivered, tipping your driver, or getting your hair done, tipping with a credit card is fast and convenient.
To tip with a credit card, you’ll provide the restaurant or business with your credit card. Once the card goes through the credit card terminal, you’ll fill out the tip field with the amount you’d like to tip. When you do this, the business will authorize your credit card for the amount listed on your bill to make sure you can cover it. This may appear as a pending charge.1
The business will then finalize the transaction, which may be different than the authorized amount if you add a tip. For example, let’s say you go out for a nice meal and spend $100. You pay the bill with your credit card and the restaurant puts a $100 authorization on your card. After you decide to leave a $25 tip, the pending $100 charge will later show up as $125.
How to Tip With a Credit Card in a Restaurant
Tipping with a credit card in a restaurant is fast and easy. Follow these steps to tip with your credit card while dining out:
Receive Your Bill
First, take a close look at your bill once you receive it. Make sure it’s accurate and only contains the items you ordered.
Calculate Tip Amount
Next, do the math to determine how much you’ll tip. The general guideline is 15% to 20% of the pre-tax bill. Simply move the decimal place to the left for a 10% tip and double for 20%. Note that some businesses will have recommended tip amounts on their credit card payment terminal or paper receipts.2
Enter the Tip Amount Into the Payment Terminal
Type in the amount you’d like to tip in the “tip” or gratuity” line on the payment terminal. If you receive a paper credit card receipt, you may need to do this with a pen.
Consider Leaving Cash in Some Cases
Sometimes, it may make more sense to leave a tip with cash instead of with your credit card. If your restaurant bill isn’t too large and you have enough cash with you, for example, tipping with cash may be the way to go. This can ensure the server receives their money right away and allow them to avoid potential credit card service fees that their employers may deduct from their final tip amount.3
Where to Tip With a Credit Card?
You can tip with a credit card at in-person restaurants. Credit card tipping may also be an option if you decide to order food online or through an app. If you’re unsure whether tips are accepted, don’t hesitate to ask.
Should You Leave Cash or a Credit Card Tip?
Before you decide whether to tip via cash or card, you should consider the pros and cons. It can be very convenient to tip with a credit card because you won’t have to worry about getting cash out or carrying cash with you. Using a credit card may also be safer as stolen cash can be difficult to recover but unauthorized credit card transactions can be disputed. Also, tipping with a credit card could allow you to earn rewards on the tip, such as cash back or points, although this will vary, depending on what type of credit card you have.
While using a credit card to tip comes with some benefits, there are also drawbacks to consider. The server or employee will likely have to wait until they get their next payday to receive your tip.4 They may also receive less than you intend to give them due to credit card processing fees that their employer might deduct.5 In addition, not all restaurants and businesses accept cash tips.
Did you know?
It’s a good idea to double-check your credit card statement to make sure it includes the correct tip amount as overcharges can happen.6
Frequently Asked Questions
The business and state dictate how servers collect credit card tips. In California, for example, employers are responsible for all credit card fees so tips solely belong to the servers.7
In most cases, industry workers prefer cash tips. With cash, they’ll receive their money immediately and won’t have to pay credit card processing fees.8
In many states, restaurants and other businesses can cover credit card processing fees with tip money. This means that servers may not get the full amount you intended to give them.9
The Takeaway
It’s easy and convenient to tip with a credit card. However, credit card tipping comes with implications for servers and other service workers that you should consider. In some situations, such as when the tip is smaller, tipping with cash may still be the better option.
1,2,6 “Here's Why Tips Don't Immediately Show Up on Your Credit Card Statement,” Motley Fool
3,4,5 “7 Times You Should Tip in Cash—and 1 You Shouldn't,” Real Simple
7 “Tips and Gratuities,” State of California Department of Industrial Relations (DIR)
8 “Cash Or Credit Card: Which Is Better For Tipping?,” Daily Meal
9 “Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA),” Wage and Hour Division, U.S. Department of Labor
Anna Baluch is a personal finance writer from Cleveland, OH. She enjoys helping people from all walks of life make smart financial decisions. Her work can be seen on Credit Karma, Forbes, LendingTree, Insurify, and many other publications. Connect with Anna on LinkedIn.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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