Drop the Credit Card?

[Mermaid]

For those of you who manage your own rentals, what are your feelings about accepting a credit card or not? I'm really debating on whether to go on a "check only" basis. On the one hand I'd be saving on the not-so-little credit card fee that is passed onto me each time a renter pays that way, but on the other hand, would it cause me to lose rentals? Credit cards are so widely used.

Our highest rental rate is just $750/week so it's not like we're talking big bucks; if that figures into the equation.

[TooFarTampa]

We have a management company but we pay a sharply reduced commission on our rents because I accept payment, collect and pay sales taxes, and generally handle everything except problems that come up when our renters are in the house.

I decided when we started doing it this way that I would take payment by either personal check or by credit card via PayPal. Is this how you collect credit cards Mermy? PayPal has its limitations and occasionally snags, but it has been useful, especially with last minute renters.

I pretty much always have at least one "live" conversation with a renter and I can tell that some of them want the convenience and others don't care. I have asked the same questions you have but I think in our case, since we fill up later than gulf front or super popular neighborhoods like Summer's Edge, continuing to accept PayPal is a good thing. I do warn renters about PayPal's "unverified" limit of $2,000, so some choose to use a CC for the deposit and a check for the final payment or vice versa. It seems to work out well.

I have considered charging a processing fee for the actual cost (or slightly less) of CC payments, but I hate nickel and diming people. It is a real cost though and I know the management companies do charge reservation fees, or at least some of them do. But often they come to me because they don't want to deal with a management company, so ...

Btw our summer weekly rate is $2385, so eventually it does add up to real money.

[beachmouse]

I wouldn't pay for a week's vacation by check these days. We pay anything that costs more than about $200 by credit or debit card because we want to have the consumer protection a credit card agreement offers in case of disputes. Nothing personal about who we're doing buisness. It's just business.

[Rather B Paddlin]

We have several rental units. Only a couple times over the course of 5 years, we have allowed renters to use paypal when they are willing to pay all fees. The cost of accepting credit cards is substancial. We may have lost a renter here or there, but ultimately we have never had a prime season vacancy. My guess it would not be a issue to stop accepting credit cards

[Mermaid]

Thanks for all your replies. I have a lot to mull over now.

[Cheering472]

The rental company I use adds the credit card fees to my total.
I thought everyone did that.

[Mango]

The rental company I use adds the credit card fees to my total.
I thought everyone did that.

It's not legal to charge for credit card fees, but a processing fee is ok, so that is where the monies are usually recouped.

[Cheering472]

It's not legal to charge for credit card fees, but a processing fee is ok, so that is where the monies are usually recouped.

Wow! I'm being held up without a gun! It even has it printed as "Credit Card Fee" on the itemized vacation rental agreement.

[Suma]

I am having the credit card debate with myself right now as well. My rental house was just completed in March and so far I haven't had anyone not rent because I don't take credit cards. However, there may be people who never contacted me in the first place because my ads do not indicate that I take credit cards.

What I am considering doing is raising my rental rate so that it covers the extra expense of credit cards then offering a discount, of that same amount, to people who pay with a check. That way, I don't lose money and people who want to use a credit card pay for the convenience themselves.

[Rita]

I am having the credit card debate with myself right now as well. My rental house was just completed in March and so far I haven't had anyone not rent because I don't take credit cards. However, there may be people who never contacted me in the first place because my ads do not indicate that I take credit cards.

What I am considering doing is raising my rental rate so that it covers the extra expense of credit cards then offering a discount, of that same amount, to people who pay with a check. That way, I don't lose money and people who want to use a credit card pay for the convenience themselves.

This sounds like a positive approach.

We pay by check most of the time when renting from owner.

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[SHELLY]

I wouldn't pay for a week's vacation by check these days. We pay anything that costs more than about $200 by credit or debit card because we want to have the consumer protection a credit card agreement offers in case of disputes. Nothing personal about who we're doing buisness. It's just business.

I'm the same...unless there is a place that is truly unique and special (like the B&B we stayed at in Maine).

CC fees are a cost of doing business--why not claim it with your other expenses?


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[Wastin Away]

I have been accepting credit cards for the past 6 years on my rental. For the past two years my credit card fees have been outragious. I had one month that it exceed 1000.00 last year (by the time they added the extra fees for the different cards that were taken). This year I am giving my guests the option but am also encouraging them to pay by check. I always speak with my guests prior to them booking my home and most of them have been more than happy to pay by check. Matter of fact, they will email and say that if it saves me the fee then they have not a problem paying by check so I think the guests understand also. I would not do away with the credit card option especially for those last minute bookings but I do think the guests understand if you tell them.

[Suma]

Does anyone know the pros and cons of paypal? Would it be better than accepting credit cards directly?

[dunelover]

Does anyone know the pros and cons of paypal? Would it be better than accepting credit cards directly?

paypal has a virtual terminal where you can process credit card receipts. We like it. You really are accepting credit cards and processing thru their virtual terminal. Or you could go paypal to paypal account.

[Suma]

Thanks Dunelover. I have a paypal account (e-bay) but wondered what limitations toofartampa referred to. I went on Paypal to see about setting up a merchant account but did not complete the process as I wanted to do a little more investigation. It appears to be less expensive than accepting credit cards-at least there is no monthly charge, but I wonder if there are any advantages or disadvantages that are not apparent.

[TooFarTampa]

I'm not sure if PayPal is the best way, but it seems to be the least expensive for occasional transactions and is relatively convenient. I have a Premier account that I have linked to my bank account. After a renter pays a payment, it goes into my PayPal account (less a 2.9 percent processing fee), and I quickly start the process of tranferring the money directly into our bank account. This takes 2-3 days and is free. Since I pay all our rental bills monthly, time is not really of the essence so this delay is acceptable with me.

There have been one or two times where PayPal is "down" and renters have been delayed in making the payment. This freaks me out a little but I have not been able to find a better way to accept credit cards for a tiny tiny business entity like ours. I know there are people who dislike PayPal but the majority of my renters don't mind doing this.

If you are going to accept rentals through PayPal you pretty much have to link your bank account to them (become "verified"), since the rentals are much more high dollar than the average ebay transaction.

Renters who want to pay for a rent higher than $2,000 also have to become verified, and some of them don't like this. $2K is PayPal's lifetime limit for "unverified" transactions. I had one renter this spring who was vehement about not giving PayPal his bank information. He ended up paying by check. Now I know to disclose to renters who wish to use PayPal that they may have to become verified if they wish to pay the full amount with a credit card. Some of them have opted to use PayPal for the deposit and send a check for the balance and it has worked out just fine.

Also, since $2K is paypal's lifetime unverified limit, if they have already paid for $750 worth of goods on ebay using PayPal over the past decade, they may not be able to use PayPal for a rental deposit without linking bank account information.

When dealing with renters I try to disclose as much of this kind of thing as is practical so no one runs into any surprises.

If there is a better solution than PayPal, I would love to hear about it!

[Suma]

Thank-you very much. Everyone who rents from me would have to become verified as my rent is over $4,000 and the deposit is $1,000. But it would at least give them an option if they did not want to send a check. And of course I would prefer a check anyway.

Thanks again for your help!

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[SWGB]

You really have to be careful about passing on the fees of the credit card to the consumer. It is illegal in Florida. You can charge everyone the same flat fee for using a credit card, but you cannot pass on the fees to the consumer directly. One complaint to the credit card company and you won't be taking credit cards for a very long time. If someone wants to charge it to their credit card remind them of the "convenience check" that most credit cards will happily provide them with. You avoid the fees as it acts just like a check.

[swantree]

We have been doing check only for 4 years now without a hitch. IMO the people who can afford the rental will pay the fee. I know of many who take the CC but don't actually process it. and/or they only use the CC for the security deposit, so when that comes to, they charge what was damaged or just tear up the slip. I have heard horror stories of CC holders balking at the charge for damage and then you as an owner have to fight the CC company for the money. so, i guess that is something to consider. I really am out of the loop to a degree because we dont' handle the finance part of the rentals, we come to the renter after the booking..."hi, i'm swantree! i'll be your concierge with your vrbo rental!..."

[CTJake]

We accept personal check or credit card. I make it clear to renters that if they want to use a credit card then they are responsible for the 2.9% charget. Only a few people end up using their credit card and they are fine paying that fee. Most people use it when they are renting last minute and can't get a check to me in time. I like to ideally receive checks 10-15 days prior to their check in just to make sure it clears. The bad thing about credit cards is that they could dispute the charges if they wanted, although this has never happened to me. We use paypal for our credit card services. It is very easy to use. Good luck

[wrobert]

I'm not sure if PayPal is the best way, but it seems to be the least expensive for occasional transactions and is relatively convenient. I have a Premier account that I have linked to my bank account. After a renter pays a payment, it goes into my PayPal account (less a 2.9 percent processing fee), and I quickly start the process of tranferring the money directly into our bank account. This takes 2-3 days and is free. Since I pay all our rental bills monthly, time is not really of the essence so this delay is acceptable with me.

The stories I have read on the ebay forums is that paypal is very quick to reverse charges if someone complains. Because of that I have my paypal linked to an account that when money goes into it, I transfer it out to another unrelated bank. That way if paypal wants to reverse something we have to talk about it before they take my money. Always fearful of someone getting my paypal information and cleaning me out. Not that they would get much further than Alabama, but still it is mine.

[tebo]

A smart man has no credit card. A very smart man, has one... just for an emergency. The smartest man has one and may use it.... but pays it off each month. Someone with some intelligence can compute or calculate the total pay-off on a...say $10,000 credit card bill over a period of time and it may scare some people in to "canning" the card. If it does we may be looking at one of these previously mentioned people. Just an opinion.

[tebo]

I am sorry if I brought up bad thoughts to others. It was just an opinion.

[TooFarTampa]

I am sorry if I brought up bad thoughts to others. It was just an opinion.

I always treat my renters as if they are the smartest -- that they are just doing it for the miles and pay it off every month.