Should Landlords Accept Credit Card Payments
by SherRon Marcek | PayRent.com
Paper or plastic? It’s a term you’re used to hearing at the grocery store but it applies to rental payments as well. Will you accept only paper payments (cash or check) or can a tenant pay rent with their credit or debit card? There has been some hesitation around landlords accepting credit card payments as there is always a risk of a tenant disputing the charge. Could be the risk be worth it? Let’s look at the significant benefits you should also consider before making your decision.
The most important reason landlords should accept credit card payments is that it gives their tenants more choice and flexibility. Your tenants are your customers so keeping them happy should be a top priority. There are a number of reasons tenants may wish to pay their rent with a credit card. Let’s look at a few:
Benefits to Tenants
- Cashflow Cushion- The first of the month doesn’t always line up with payday which can put a strain on your tenants to pay on time. Having the option of paying their rent with a credit card can give them some breathing room when it’s between paydays or if unexpected expenses popped up.
- Credit Building- Tenants looking to increase their credit score may want to use a credit card as their payment method. Large charges that are paid in full will reflect positively on their credit and give them a boost.
- Credit Card Rewards- Many credit card companies offer rewards to their users. In order to qualify for some of these bonuses, users must charge a certain amount to the card in a set period of time. It is common for housing to be a person’s largest expense so charging the amount would allow your tenants that extra push to bonus programs.
- Avoid Late fees- Nearly all credit card payments come with a processing fee. For instance, PayRent charges 3.5% of the transaction plus $0.30 to process the transaction. However, these fees can be significantly cheaper than a 10% late fee or a bounced check and overdraft fees.
Benefits to Landlords
Your tenants aren’t the only ones reaping the benefits of credit card payments. Landlords who accept credit card payments are more likely to be paid on time because of the flexibility they are allowing their tenants. The transaction is simple and funds are available sooner than ACH transfers. There is also a clear record of the payment for reference.