Collecting late payments via Credit Card

[Sean H.]

I own some rentals in blue collar areas. Some houses are notorious for being occupied for 3 months no issues, then late payments, then partial payments, then no payments, and eviction. They cash flow excellently when rented, so I do not want to get rid of them and I have trouble finding Section 8 tenants for these units.

What I am thinking is, have my property manager get their credit card number when they sign their lease. Have her download an app such as squareup (https://squareup.com/). Have a clause in their lease that states something like "On the 6th day of the month, if the rent has not been paid, the tenant agrees to have their credit card charged for the total rent amount, plus a $50 late fee, as well as any credit card processing charges." This will guarantee payment.

Payments charged would be something like this..

Rent - $450
Late Fee - $50
Credit card fee (2.75%) - $13.75
Total charged - $513.75

Has anyone tried anything like this? Is it entirely legal? Pros/Cons?