NEW YORK – Gretel-Ann Fischer already told customers that she won't accept credit cards for purchases under $5 at her Vermont bakery. The last thing she wants to do is alienate them by passing along the transaction fee she has to pay each time they use plastic.

Fischer is one of thousands of retailers in 40 states who now have the right to charge customers the fees that come along with using credit cards. They won that right as part of a settlement of a class action lawsuit brought by merchants against the credit card companies Visa and MasterCard and major banks that issue credit cards. But many small retailers say that customers will bolt if they tack on a surcharge that could range from 1.5 percent and 4 percent of purchases made with plastic.

"It's just not going to happen. It's hard enough to get them to accept the $5 minimum," says Fischer, who owns Cupps Cafe and Bakery in Winooski, Vt. She imposed the minimum because of a 17-cent per transaction fee that's in addition to the 2.5 percent that Visa and MasterCard charge for the entire purchase. Seventeen cents on a $2 cup of coffee was too much for the bakery to absorb.