Can Contractors and other Businesses Take a Credit Card and Pass Along the Fee?
Some of our contractor and others service-related clients have an interest in accepting credit cards to help their client’s finance larger projects. This leads to increased flexibility for the consumer, while ensuring that the business gets paid timely and fully. Most smaller businesses do not have the ability to finance projects for customers. However, some of our clients have been told by banks that they cannot pass along the credit card fees to the consumer. Are you allowed to accept the credit card while charging an extra fee?
The answer is Yes. Federal law allows for credit card surcharges so long as you:
Clearly disclose the fact that there is a surcharge before the transaction
Display the credit card surcharge on the receipt
Keep surcharges below 4% of the transaction, or the amount of the fees the merchant pays to the credit card companies, whichever is less.
Louisiana law does not prohibit these fees either. As a result, contractors can provide for a surcharge in their contract and accept credit cards as a result. This allows for efficient collections of unpaid work without losing profit. We recommend full disclosure of these fees in your initial estimate and your eventual contract.
If your company would be interested in accepting credit cards, Montiel Hodge can help you adjust your contract to ensure legal compliance and profitability for your company.
(504) 323-5885
contactus@montielhodge.com
