Who pays the fee when a homeowner pays by credit card?
Short answer. Whoever the contract says, as long as the policy was disclosed before signing. Maryland allows credit card surcharges with proper disclosure, but adding a fee to the invoice after the contract is signed is a violation.
Work it through
You're the contractor. Pick what you'd do, then see how each choice plays out.
A client wants to pay the entire $20,000 contract with a credit card. Your merchant processing fee is 3% — that's $600 out of your margin.
"I want the points. Can you absorb the fee?"
- Correct
Credit card processing fees are a business cost. Some contractors build them into all pricing. Others offer a small discount for cash/check payment. Maryland law allows credit card surcharges with proper disclosure, but they cannot be hidden. Whatever you do, make the policy clear BEFORE the contract is signed. A $600 fee dispute after the project is done is a $600 problem that becomes a $6,000 complaint.
- Wrong
Adding undisclosed fees after the contract is signed is a contract violation and potentially deceptive. The contract price is the contract price. If you want to charge for credit card processing, it must be disclosed before the contract is executed. Surprise surcharges on final invoices are a top consumer complaint category.
All 11 deposits, payments & change orders questions
- How large a deposit can a Maryland contractor take?
- Can you accept full payment up front for a home improvement job?
- Must you refund a deposit if the homeowner cancels before work starts?
- How do you collect an overdue progress payment?
- Can a homeowner hold back part of the final payment?
- Who pays the fee when a homeowner pays by credit card?
- Does added work need a written change order?
- Can you collect for extra work that was never put in writing?
- How do you handle a weather delay past the contract completion date?
- What if the insurance payout is lower than your estimate?
- How do you handle a client whose vision is bigger than the budget?