For the second time since moving into this apartment several years ago, the landlord (a national corporation, not an individual or a family) has decided to stop accepting credit cards for rent payments.
While I suppose this is good for tenants who don’t pay their full credit card balance every month, but I’ll no longer be able to accrue cash back rewards on my rent payment.
When I came home this evening, a note was attached to my doorknob. This is the method of communication the apartment manager prefers. The note reads:
Just a reminder the effective April 1st we will no longer be able to process credit/debit cards for rent. If you had an auto-pay set up it will no longer charge to your account.
Please stop by the office to setup Express Rent Debit or you may use check or certified funds for payments.
Thanking you again for your assistance with the above.
Besides the embarrassing grammar, this is not a reminder. This is the first I’ve heard about it. Nevertheless, I’ll just have them automatically debit my ING Direct savings account. The last time they revoked the credit card method of rent payment, they reinstated it without alerting me. I’m not much concerned about what they do in the future this time around, as with any luck I’ll be moving out in a few months.
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I am not really surprised, it is rather expensive to process credit card payments. Perhaps at first the losses due to credit card fees were not as much as the bounced checks and late payments that were prevented, but probably too many of their good tenants signed up for the credit card payment option, and now it is loosing money for them.
I can’t understand why they wouldn’t allow a payment from a credit card. As long as they get there money I don’t see why they’d care if it were a check or from Visa. I guess they must have some reason.
Yep, processing credit cards adds up. That company owns approx. 240,000 units (per their website). To make the math easy, let’s say you’re paying a processing fee of 2% on each transaction, if each unit rents for $1000/month, you’re losing $400,000 per year to processing fees.
I work for a similar company (but much smaller) and just cutting our check-processing time by a single day means over $100,000 per year in extra interest earned, from what I heard in one meeting. So your apartment’s management company is looking at a huge savings by dropping credit card payments.
That’s assuming they aren’t paying massive bank fees for bounced checks from tenants. When they made the decision to *reinstate* credit card payments last year, they must have done that for a financial reason as well.
Dealing with the receipt of checks is also much more of an administrative hassle than credit cards. So, while I’m sure they made the decision from a purely financial standpoint (ie., not customer service), there are other financial aspects to consider other than just the credit card processing fee.
Typical of most large companies, someone in the finance department of your landlord’s company came up with the brilliant idea to just get rid of those pesky fees to Visa. When companies do this, they typically neglect to look at the other side of the equation where doing something adds costs elsewhere.
My guess is costs will rise because of these other factors people have mentioned and they’ll go back to accepting credit cards. But not until the genius who made this decision is given a nice fat bonus for “saving the company hundreds of thousands of dollars a year.”
My landlord actually accepts PayPal, which kind of blows me away. Very convenient for me, though.