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.

> Is that practice illegal? I've never gotten a discount for using cash or debit.

It is no longer permitted for payment networks to prohibit discounts for cash or surcharging use of credit.

A few of the merchants I use regularly have credit surcharges now. It's pretty common at gas stations near me. Almost all business with my state or local government has a 3% fee for card use.

Yes in the US. It's usually gas stations, small businesses, and less expensive places offering the discount. The only gas station around here that doesn't charge extra for card is Costco, where they also don't take cash.