While it's technically correct that merchants can't add a surcharge, there's a work-around. The charge is actually via a third party which adds a "service fee" or "convenience fee." (That's how paying your U.S. tax bill with a card works, too.) This fee covers the credit card company's fee (which includes what it pays for miles, its costs, and its profit) and the third party's costs and profit. Even allowing for economies of scale, there ain't much left to pay an airline for the miles. Therefore, unless you have a specific high-value use in mind for the miles (international upgrades from deep-discount economy fares are a prime example), or happen to hit a double-miles promo on the card, it's a losing game.