When customers ask John Herman if his company, Thermal Sash, in Chester Springs, Pa., accepts credit cards, he assures them that it does. Not that Herman wouldn't prefer a check, but sometimes taking a credit card payment can make the difference between closing the sale versus having to return the next week after the homeowner has explored other payment options. “I'd rather move the project along and have the job in progress,” Herman says, than have to rely on coming back, since “circumstances change.”

TWO MINDS U.S. banks now make more than $30 billion annually from the fees merchants pay for the privilege of accepting credit cards. The interest rates that credit card customers pay range from 10.3% to 24.96%, with an average interest rate of 14.84%, according to credit card comparison website CreditCards.com. As of 2008, there were 176.8 million cardholders with an average of 3.5 credit cards each.

Home improvement contractors are often of two minds regarding accepting credit card payments. On the one hand, they're not thrilled with the merchant fees, which average 2% for all businesses in the U.S. but can be higher depending on the transaction. Kitchen and bath contractor Anthony Home Improvement, in Elkins Park, Pa., reports paying a 2.5% average merchant cost for card use, and 3% for American Express. Typically, companies don't charge customers for using a credit card, but that works both ways. For Anthony Home Improvements president Steven Klein, “If a person says: ‘How about if I don't give you a credit card, is it less?'” the response is: The price of the job is the price of the job.

IMMEDIATE ACTION Herman finds credit card use rare because “when people are contemplating a large job like home improvement, they don't just start shopping, they think about where they're going to get the money.” But offering the credit card payment option is worth it for many home improvement contractors because customers can act immediately — particularly for small jobs. For Herman's clients, credit card purchases are usually less than $2,000. Kaufman says that his customers typically use cards on small jobs such as roof repairs because “they don't have to lay out the money right then and there.” And, since a leak is the first sign that a roof needs replacing, the client is often back again later. In addition, credit card acceptance distinguishes professional companies from businesses that don't or can't accept cards for payment.

For many contractors, the question is less about whether to offer the credit card option but how to structure the associated fees into the job cost. “We list it under Cost of Goods Sold,” says Doris Kaufman, co-owner of Mark Kaufman Roofing, in Florida.