So, should you accept credit cards? There's no easy answer. There are advantages and drawbacks. For starters, the process of obtaining a credit card merchant's account can be somewhat cumbersome.

You have to fill out an application (quite similar to a loan application), then, based on your credit and the dollar amount per transaction you will be processing, they will assess your situation and set up your account. There are set-up charges that can cost between $100 and $1,000, (don't allow a bank to convince you that you must purchase a credit card swiping machine . . . how can you swipe a card from hundreds of miles away?).

Moreover, when you accept credit cards from your renters, there is always the danger of chargebacks (although very rare). This is when someone rents your vacation home, then claims there was some sort of problem (i.e., “the place was smaller than they said it would be,” or “the neighbor's barking dog ruined my vacation,” etc.). They tell the credit card company they are disputing the bill. And there is a possibility that you may never get paid. Therefore, if you are going to take credit cards, make sure that you have a written agreement, signed by the renter, to charge the credit card with all of your terms and rules clearly spelled out.

Credit cards offer a lot of convenience for your renters. Suppose you are the renter and you call someone (that you saw on the Internet) who owns a property. The owners say, “Yes, I have that available. It will be $1,000 rent plus a $100 cleaning fee + 10% tax. Now, please send me a personal check for $1,210.” How can you be sure that person really has a property? Does the condition of the property match the description? Accepting credit cards gives the renters a certain amount of comfort, a feeling that they are protected.

There are many companies that offer merchant credit card accounts. You can go to your local bank, lending institution, or even to the Internet to find them. The options are about as endless as your mortgage options.  Be sure to research and find the one that best suits your needs. Another option comes from HomeAway.com. We at HomeAway.com offer a credit card merchant program that is specifically designed for vacation homeowners. This program makes credit cards a secure and viable option for you to consider. We have painstakingly worked out deals with the banks so that accepting credit cards for a vacation rental is not considered a “high risk” transaction. The result is lower fees for you. Furthermore, the application process for this specialized merchant account has been streamlined and is much simpler than other programs. Another benefit is that they will consider rental income as part of your overall financial picture. Most other credit merchant accounts will not.

Credit cards not only give the owners the assurance of payments, they also give the renters a certain amount of comfort, a feeling that they are protected. A very necessary feeling when you are blindly renting from strangers via the Internet. In fact, I am certain that there are some people who limit their search only to properties that accept credit cards because of this fear. You might not want to miss out on these folks' business.

© Christine Karpinski